Venmo now supports merchant payments
For the first time, consumers now have the option to pay merchants, not just their friends, using PayPal's digital payment app Venmo. Launched on January 27, the feature is currently limited to use within two third-party apps, food delivery service Munchery and events ticket vendor Gametime. But, with services expected to expand soon, these early adopters can offer us a glimpse into how Venmo could change the landscape for in-app payments.
From a consumer standpoint, here's how the service works: iPhone or Android users who have Venmo installed on their phones will see a Venmo button among the checkout options in compatible apps. Then, with just a tap, they will be able to use whatever payment information they have stored in the app to fund their purchase. For PayPal, this marks a significant step forward in encouraging shoppers to use its services. Previously, many mobile shoppers were put off from buying with PayPal because entering login credentials tended to be as time consuming as typing or scanning a credit card.
"Venmo handled $2.7 billion in peer-to-peer payments in Q4."
On the merchant side, retailers who incorporate Venmo into their checkout process could gain the loyalty of Venmo's rapidly growing youthful user base. In the fourth quarter alone, the app handled $2.7 billion in payment volume, up 174 percent from the same quarter the year prior. Plus, with each one of these transactions the user has the option to post the details into an activity feed visible to his or her friends. This social component represents an opportunity for a new type of marketing for participating retailers, a factor that surely separates Venmo from other mobile payment companies.
However, this access and convenience will come at a cost. While the service is free for consumers, Venmo will charge merchants 2.9 percent of each transaction in addition to a 30 cent transaction fee.
At Vantage, we're experienced in helping merchants determine which payment processing solutions are right for their business models. Contact us today to learn more about in app payment solutions, ask a question or schedule a consultation.
