Dive Brief:

• PayPal's Venmo peer-to-peer payments service is introducing a debit card to allow account owners to use their balances for purchases at any brick-and-mortar or online retailers where Mastercard is accepted, according to a Venmo blog.

• The debit card also can be used at ATMs and can have its balance reloaded from a user's established account funding source when the card balance runs low. The card also can be disabled easily through the Venmo mobile app if lost or stolen, the company said.

• Purchases made with the debit card show up in a user's Venmo transaction history, and as with Venmo peer-to-peer payments users can share details socially about what they purchased, and can split transactions with their Venmo network friends.

Dive Insight:

The announcement came almost a year to the day after Venmo was reported to be testing the notion of offering a physical debit card. So, even though it took a while to happen, the move doesn't come as a surprise, and arrives amid great change in the payments space, as many payments players are seeking to supplement their core offerings with as many physical, digital and mobile options as possible.

Venmo has been a massive hit as a peer-to-peer payments service, but of course PayPal wants to leverage that strong base to Venmo account holders using even more services and generating more revenue. Even with great success, a peer-to-peer payments offering is only of limited value to a company like PayPal, which more broadly draws much of its value from its strong relationships with retailers and merchants. It's in PayPal's best interests to find ways to allow Venmo users to spend more of their balance with those merchants.

Prior to the debit card announcement, PayPal and Venmo already allowed Venmo users to pay using the Venmo app at websites from retailers like Foot Locker and Lululemon. The debit card launch takes this strategy a bit further, and though Venmo didn't hint at any future offerings, it wouldn't be surprising to see other Venmo debit cards — or perhaps even Venmo-branded credit cards — rolled out in the future.

The other reality confronting PayPal and Venmo is a competitive one. They need to keep one eye on their rearview mirror, as companies such as Apple and Square continue to build up their own peer-to-peer payments offerings.

Venmo users are starting to take notice of the efforts being made to give them more ways to spend their Venmo balances. About 11% of active monthly Venmo users "engaged in a monetized experience" during the first four months of this year, according to comments attributed to Venmo Chief Operating Officer Mike Vaughan in a Marketwatch report about Venmo's debit card launch.