Paypal’s Big Plan for Venmo in Retail Sales
Venmo is the go-to brand for P-to-p payments, but can it do the same for retail? And does that mean Paypal has to downplay its own brand?
Venmo is well established as a tool for P-to-p payments and social interaction. And merchants should take note as Paypal brings Venmo into the spotlight as a means of retail payments.
Paypal’s latest move to promote Venmo for retail payments may be the company’s clearest admission of the limitations of the Paypal brand. Paypal has a long history of buying brands that it could not defeat in the market, and Venmo is no exception. Other examples include Billmelater (now Paypal Credit) and Braintree ( Venmo’s owner at the time of the acquisition). But Paypal never seemed particularly threatened in its primary mission of online and P-to-p payments — until Venmo came along.
Venmo somehow succeeded where years of upstarts failed, to the point where Paypal is now comfortable putting Venmo’s own brand before its own. In the new setup, Paypal is testing dynamic payment buttons that swap in the Venmo brand for Venmo users when visiting merchant websites.
While this gives Venmo users the option of shopping at more than two million merchants, it also concedes that Paypal may never convince Venmo consumers to think of themselves as Paypal users. Despite the risk to the Paypal brand, the company sees this as a positive development.
“We’re seeing in some instances that the appeal of Venmo has prompted some of the largest and most influential U.S. merchants to expand existing, or begin new, processing relationships with PayPal,” Bill Ready, chief operating officer at Paypal, said in an Oct. 17 blog post.
As much as anything, it puts Venmo in the forefront of a promise that mobile payments has made since its inception — that it is easy for users to split the cost of purchases among friends and share payments on the Venmo feed.
“My kids go out and buy things jointly a lot, sometimes as a gift, or something for themselves, but someone wants to pay for part of it,” said Steve Mott, principal of Better buy design, a Stamford, Conn.-based consulting firm.
“It’s very easy to do with Venmo, and that’s a different lifestyle that the payments industry really hasn’t stepped up to,” Mott said.
Venmo has grown to the point where the Paypal.me P-to-p service created two years ago to lure older age groups may not even be necessary. It appears Paypal realizes by leveraging Venmo and its infrastructure it is “creating a new conduit into the future of digital payments where it is more of a social interaction,” Mott added.
And that also appears to be a major selling point for Paypal and Venmo as it expands retail reach.
The move allows merchants to connect with a new audience of shoppers, many of whom engage with Venmo multiple times a day, Ready said in the blog post.