PayPal is revamping its co-branded PayPal Cashback Mastercard credit card, issued by Synchrony, which will now offer users 3% cashback when paying with PayPal and 2% cashback on all other Mastercard purchases. The company says the higher rate can be used whenever a customer pays with PayPal, including if they pay online, on mobile devices, or even in-store using a PayPal QR code.

The company notes that its existing cardholders will automatically switch from the previous 2% cash back rate to 3% on their PayPal purchases. It will also soon make the card available to new customers through the PayPal mobile app and PayPal.com in the coming weeks.

Along with the cash back upgrade, which is the key feature of this new card, PayPal says it has updated the card management user interface in the app and on its website to allow customers to more easily access their rewards, manage their purchases and make payments. Additionally, customers will now be able to access their rewards daily instead of having to wait for a monthly statement cycle. And they’ll be able to choose how they want to use the rewards, including making statement purchases, making purchases from retailers, or transferring funds to a linked bank account or debit card.

To encourage new signups, PayPal is incentivizing customers with a $100 cashback bonus on the first $500 spent on the card, which has no annual fee.

The improved credit card usability comes as PayPal faces increased competition from buy-now, pay-later (BNPL) companies in the e-commerce space. For example, Afterpay in December partnered with Rakuten to allow shoppers to earn cash back when they made installment purchases from participating merchants. During the same month, Affirm also launched its own Cash Back program. And of course, retail giant Amazon offers its own cash rewards that pay 3% for Amazon and Whole Foods purchases.

“Our customers shopped in 34 different categories last year, showcasing the diversity of their needs and interests, and we wanted to create a credit product that was flexible and better suited to rewards with their spending behaviors,” said Susan Schmidt, vice president of consumer credit at PayPal. , in a report. “The new PayPal Cashback Credit Card was designed so PayPal customers can earn rewards and cash back for everyday purchases, regardless of what categories they spend in that month.”

PayPal’s news follows mixed fourth quarter 2021 results reported in February, which saw the payments company blame issues including eBay’s transition, inflation, supply chain issues and more for its weaker directions, revenue pressure, and slower user growth. But more broadly, PayPal faces a range of competitors in online and mobile payments, including integrated mobile payment systems Apple Pay and Google Pay, the various BNPL companies, Amazon’s own checkout and peer-to-peer rivals. to-peer like Cash app and Zelle.