Venmo, the adored millennial app that lets friends send money to each other, wants people to start using it to pay for purchases in stores.
Venmo, the adored millennial app that lets friends send money to each other, wants people to start using it to pay for purchases in stores.
Venmo and its parent company, PayPal $PYPL, are adding in-store payments to their mobile apps in the first half of 2017, a PayPal exec has confirmed to Quartz. The in-store digital wallets will use near field communication (NFC), similar to Apple $AAPL Pay and Android Pay. The digital wallets will be available first on Android because Apple’s NFC chip is closed to third-party developers. Jim Magats, PayPal’s head of global core payments, tells Quartz that PayPal is in discussions with Apple to see how they can work together in the future, but declined to comment further.
Join 500,000+ readers who start their day with Quartz.
By subscribing, you agree to our Terms of Service and Privacy Policy.
Venmo is just the latest entrant to the crowded mobile-wallet market that includes banks, retailers, and technology giants, such as Apple and Google $GOOGL. But Venmo has a unique advantage because of its built-in social network. Part of the reason why millennials use it so religiously is because it’s fun, letting them view, like, and comment on transactions. What Venmo and PayPal will have to figure out next is how to encourage customers to use their wallets over competitors. One possibility is to present offers from merchant partners to users.
As Quartz reported in January, Venmo has been rolling out in-app payments. This let users pay for purchases made within apps using their Venmo accounts, simplifying the check-out process since they don’t have to type in information like billing and shipping information on a small screen.
The decision to enter in-store payments comes with its costs though. PayPal recently struck deals with Visa $V and MasterCard to use their tokenization technology (a security feature that changes credit card numbers into random strings of digits), setting it up to launch in-store payments. But to get there, PayPal had to mend its rocky relationship with the credit-card networks—PayPal has designed its check-out process to encourage customers to pay using their bank accounts to avoid credit-card transaction fees—and agree to add Visa and MasterCard as payment options in its existing app.
