PayPal Holdings Inc. announced that, starting this week, more than 2 million U.S. retailers will be able to accept payments through Venmo, where customers can now shop on their mobile phones and make purchases at these retailers.
Venmo customers will be able to split online purchases among groups. Businesses can also offer Venmo as a mobile payment option through the PayPal and Braintree platforms. PayPal will charge merchant fees for processing Venmo payments, Ben Mills, head of product at Venmo, reportedly told Reuters.
At the Deutsche Bank Technology Conference in September, PayPal CFO John Rainey called Venmo the company's "crown jewel" and was optimistic that getting merchants to adopt the mobile app as a payment option should not be difficult. Guggenheim Securities analyst Jeff Cantwell highlighted the timing of this launch, two days before PayPal reports its third-quarter earnings, and a week ahead of a conference where CEO Daniel Schulman will be speaking.
"Most importantly — right in advance of the holiday season — the peak season of the year for consumer spending," he wrote in an Oct. 17 note. "This gives PayPal time to explain how to use the service via a national brand campaign."
All Venmo customers will soon be able to instantly transfer money from Venmo to their bank accounts via eligible debit cards for 25 cents per transfer. That instant deposit feature will be "something to watch," said Cantwell, adding that it will likely increase revenue slightly more than previously thought.