The Current, delivered daily.
Venmo grew as a way to exchange funds between friends. Now, it’s set to become a payment option for goods purchased on Amazon.
The news: Amazon announced Tuesday that it will begin accepting payments from PayPal-owned Venmo, billing it as a way to add more choice in the checkout experience. Amazon is adding the payment method in time for the holidays. The rollout of the service is already underway for select customers, and will be in place by Black Friday, Amazon said.
How it works:
- During checkout, shoppers click “Select a payment method” and then tap “Add a Venmo account.”
- Then, the Venmo app opens, where users can allow Amazon to charge Venmo for future purchases.
- Next, an Amazon confirmation screen will be displayed
- Plus, users can choose to set Venmo as the default payment method for future Amazon purchases.
Screenshot of Amazon + Venmo, (Courtesy photo)
What Venmo brings: Venmo has a community of 90 million users. The app offers a way to settle up bills or purchases, so it can directly access bank funds. But money that is paid sits in a Venmo account. That means many users have funds stored in the app. Now, those funds can be used to pay for Amazon purchases. The idea behind Venmo has always been that it functions as a digital wallet. Being able to pay for goods feels like a next step in that evolution. It gives the payment app additional utility beyond peer-to-peer exchanges.
Ready to shop: Internal research from the company showed that Venmo users shop over two times more frequently than the average shopper, and are 19% more likely to make repeat purchases. It has led Venmo to more direct integrations with businesses through direct payments and business profiles. Amazon makes the app available for a marketplace.
Share it: Venmo is also a social form of payment, with a feed where people can share details of purchases or exchange emoji-laden messages. This opens up the potential for people to post about their Amazon purchases going forward.
For Amazon, it’s a new payment method that’s responsive to how people pay. Amazon already offers standard credit cards and gift cards. It added a Buy Now Pay Later option through a partnership with Affirm last year. Interestingly, it does not offer as many payment options as some ecommerce checkout pages that offer Apple Pay, Shop Pay, et. al. In fact, Shopify added Venmo as a checkout option in 2018 as it looked to offer merchants choice. Amazon's move is at least one step toward adding more ways to pay.Key quote: “We want to offer customers payment options that are convenient, easy to use, and secure—and there’s no better time for that than the busy holiday season. Whether it’s paying with cash, buying now and paying later, or now paying via Venmo, our goal is to meet the needs and preferences of every Amazon customer,” said Max Bardon, vice president of Amazon Worldwide Payments, in a statement. “We’re excited to continue to offer customers even more options when it comes to how and when they want to pay for their order.”