October 19, 2017
Venmo, PayPal’s P2P payment service that has become a generic verb among millennials who want to pay each other using their phones, this week expanded the service so users can pay at merchants. At around 2 million online merchants that accept PayPal as a payment option, they can click on that and then choose Venmo to pay using their Venmo account balance or a linked credit card.
When users make P2P payments on the platform, using a linked card rather than the Venmo balance that draws from a bank account costs users a fee. When paying retailers, however, merchants will be responsible for the fee, as they are when consumers choose PayPal. In return, according to PayPal COO Bill Ready, Venmo will deliver merchants its younger, more active customer base.
“With Venmo, merchants can reach a new audience of shoppers, many whom skew millennial and engage with Venmo multiple times throughout the day,” Ready said. “And the Venmo social feed represents an entirely new way for merchants to increase awareness and open new purchase opportunities.”
What Venmo enables for users that PayPal doesn’t is the ability to pay for something and then split the bill later among two or more Venmo account holders. It also maintains the social aspect of Venmo that lets users’ friends know they paid for something.