PayPal has today announced it is launching a new rewards credit card into the Australian market next month.
The new credit card comes hot on the heels of PayPal’s new buy now, pay later service also scheduled to kick off in a matter of weeks.
Unlike recent new credit cards from NAB and CBA, which charge fees instead of interest, this new PayPal card is focused on rewards, with no annual fee and 20.99 per cent interest.
PayPal is joining a crowded credit card market. There are currently 69 providers on the RateCity database and almost 40 per cent of these offer rewards cards.
|Interest rate||Annual fee|
|PayPal Rewards card|
|Average credit card|
RateCity.com.au research director, Sally Tindall, said: “PayPal has been a dominant player in online transactions for years. Now it’s branching out into credit by launching two new products in a matter of weeks, ‘Pay in 4’ and a rewards credit card.”
“PayPal wants to be everything to everyone. It can see the payments market is evolving but also fragmenting, and so it’s looking to cover off as many bases as possible,” she said.
“Banks and payment providers are doing all they can to stay relevant in a rapidly changing market. If they stick with their knitting they’re going to be left behind.
“That said, credit cards might be on the decline, but they aren’t dead and buried.
“There are still over 12.5 million personal credit card accounts, making about $22 billion in transactions every month, with almost $20 billion accruing interest.
PayPal tapping into Australians’ love of rewards credit cards
PayPal’s new credit card will offer customers rewards on every dollar they spend with no annual fee.
“Australians love the idea of getting something for nothing but if there’s money owing at the end of the month, they’ll be hit with interest charges of 20.99 per cent,” Tindall said.
“Earning rewards points without having to pay an annual fee can be an attractive proposition for diligent customers, but it’s not yet clear how many points customers will need to redeem rewards, so the devil could still be in the detail,” she said.
PayPal’s credit card competition: Rewards cards with no annual fees
|American Express||Essential Credit Card|
|Coles||No Annual Fee Mastercard|
|HSBC||Premier World Mastercard (Rewards Plus)|
|BankVic||Qantas Visa Credit Card|
|Kogan Money||Black Card|