PayPal hopes to cash in on millennials’ love of Venmo
By Trey Williams for Market watch,
Since rolling out to the public in 2012, Venmo has been a peer-to-peer payment app. Millennials have taken to it as a way to send money and emoji to friends for meals, event tickets, bills, etc.
Now the PayPal Holdings Inc.-owned company is breaking out to hopefully simplify paying for products in merchant apps, improve the mobile-payment user experience and answer questions of when it will begin to fully monetize.
“We’re not coming right out the gate saying, ‘We’re here to solve the way you pay for things at physical stores,’” said Venmo General Manager Mike Vaughan. “We think we’re solving a real problem. If you’ve ever tried to buy something on your phone, the experience isn’t great.”
Rather than pulling out your debit or credit card and entering the financial information, some merchants will have the option of letting you pay with a tap of a button via a Venmo account.
“We’ve got a very engaged Venmo base and they have been asking to expand that to move into a shop,” PayPal PYPL, -2.10% President and Chief Executive Daniel Schulman said during the company’s earnings call with analysts Wednesday. “We think this is just the beginning of the ways that we can start to monetize what is a rapidly growing segment of the market that really thinks of Venmo as a way they manage and move money.”
Venmo isn’t the only company to offer such a service; its parent company, PayPal, even has a similar option called One Touch. What Venmo does have is a growing, dedicated user base that’s attracted to its user experience, and trusts it.
“They’re cornering off the market that they play best in,” said Mark Ranta, head of digital solutions at ACI Worldwide. “Moving money from person to person helps you to build the network you need to be able to go and monetize off the next thing.”
PayPal said Venmo processed $2.5 billion in total payment volume during the company’s most recent quarter, up 174% year-over-year. Vaughan said though adoption in the mobile-payment landscape as a whole hasn’t been staggering, people are getting more comfortable using their phones to pay for things, which is good for business.
Right now, Venmo’s in-app pay option is only available for GameTime, a last-minute concert and sporting-event ticketing app where people can book Champions League Tickets, and Munchery, a food-delivery service offered in New York, Los Angeles, Seattle and the San Francisco Bay Area. Venmo’s in-app pay option isn’t available for all users yet either. Vaughan said Venmo will take its time rolling out the product, expecting to go wide to the public later this year. And with the backing of PayPal and its merchant relationships, there are plenty of opportunities.
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“You’ll probably see it roll out a lot slower than you’d expect, and slower than we could roll it out,” Vaughn said. “This is the first time merchants are integrating Venmo into their apps, so there’s a lot that goes into that. We want to make sure we get the product right, and users and merchants are going to show us the way.”
the article first appeared in Marketwatch.com