Dive Brief:
- Users of PayPal’s Venmo peer-to-peer payment app will no longer be able to tap that tool for purchases on Amazon as of Jan. 10, according to a notice on Venmo’s website.
- “Due to recent changes, Venmo can no longer be added as a payment method,” the Venmo site notice said. “Venmo will remain available to users who currently have it enabled in their Amazon wallet until 01/10/24.”
- “Venmo and Amazon have agreed to disable Venmo as an option to pay on Amazon at this time,” PayPal, which absorbed the Venmo business in 2013, said in an emailed statement Thursday, without further explanation. “Customers can continue to add their Venmo debit card or credit card to their Amazon wallet to pay on Amazon. We have a strong relationship with Amazon and look forward to continuing to build on it.”
Dive Insight:
PayPal has been struggling to grow in recent years, missing goals for user account growth, but the peer-to-peer app Venmo has offered prospects for growth, especially given its popularity with young consumers.
The company recently changed up its CEO, replacing long-time leader Dan Schulman with Alex Chriss, who has been building his strategy and management team since he was appointed in August.
Nonetheless, PayPal has spent the last decade since it acquired Venmo through its purchase of Braintree trying to integrate and build up the Venmo proposition within the broader company ecosystem. Earlier this year, it made a bid to increase use of the app among teens.
Now, Amazon’s decision to take Venmo off its menu of payment options will create another setback for PayPal and its growth strategy. An Amazon spokesperson confirmed via email that Venmo will no longer be accepted on the e-commerce giant’s website or app, adding that “Customers can still use nearly a dozen other payment options, such as debit cards, credit cards, checking accounts, or installments to pay for their orders.”
PayPal had about 58 million Venmo users as of March, PayPal Senior Vice President Doug Bland said during a presentation that month. At that time, Bland said PayPal was continuing to work with Amazon on ramping the use of Venmo on that major digital marketplace after an initial roll-out late last year.
Giving consumers more ways to segue from Venmo use to the company’s array of payment options has been one of the ways PayPal has sought to drive more user engagement overall in its customer accounts. That focus on engagement increased over the past two years as the company fell short of adding more customer accounts.
