Originally used for splitting rent or a dinner bill, payment app Venmo now lets businesses accept money through their app. For SMBs, this presents a new way to connect with the app's top demographic: Millennials.
Announced Tuesday, PayPal's person-to-person money transfer app Venmo lets users pay more than 2 million US retailers, including big names like Forever 21 and Foot Locker. This number is up from the self-reported "thousands" of merchants that accepted such payments in July.
SEE: SMBs (Tech Pro Research)
"Thanks to the power of the PayPal platform, starting with the mobile web allows us to enable Venmo as a payment method for millions of PayPal merchants at one time without any additional integration work on the merchant's part," a Venmo spokesperson told TechRepublic.
The app saw $8 billion in transactions in the second quarter, according to Bloomberg. Nearly all of that comes from Millennials, who make up 81% of the app's users, according to ComScore. It is easy and cheap for SMBs to cash into this market by becoming one of the merchants who accept payment via Venmo.
Any business using PayPal will be able to accept payments via Venmo over the coming week, according to a Venmo spokesperson. As long as a business is already on the PayPal platform, there is no additional equipment or expenses to integrate Venmo payments.
Some businesses, like Poshmark and Gametime, have added Venmo as a payment option within their native apps. Others work directly through the Venmo app.
Paying through Venmo is safe and free for customers, the company said. Users are not charged a fee when paying businesses. The app only shares the user's full name with merchants, and, in some cases, will share a user's address. All purchases made at participating retailers are covered by Venmo's Authorized Merchant Payment Protection Policy.
This will allow SMBs to connect with a new audience by expanding into an app that audience is already checking and using regularly. Paying a business through Venmo requires little setup for an existing user. Since some users already have a bank account or debit card hooked up to their Venmo account, paying through the app might be faster than whipping out a real-life wallet or typing in a credit card number.
Venmo also acts as a social network, as users can share their purchases and money transfers with their friends on a timeline, often using emojis to explain what they are paying for. Merchant interactions are no different: Users can share purchases on the Venmo feed, making friends aware of businesses and opening them up for further interactions.
The 3 big takeaways for TechRepublic readers
- Peer-to-peer money transfer app Venmo allows users to pay over 2 million retailers directly. As long as they're using PayPal, SMBs can accept the app without additional equipment or cost.
- Accepting Venmo payments can help businesses connect with Millennials, who make up 81% of the app's users.
- Due to the Venmo feed, which shows friends who a user is paying and a message about what they bought, retailers can increase brand awareness and have a new spot to promote their brand.
- Should your business adopt mobile payments? (TechRepublic)
- You can now buy from 2M retailers using Venmo and emojis (CNET)
- PayPal enables Venmo payments at millions of US retailers (ZDNet)
- WWDC 2017: Can Apple's P2P payments push challenge Venmo? (ZDNet)
- Venmo: The secret, hip social network you've never heard of (CNET)
Olivia Krauth is an Education Reporter at Insider Louisville.