January 28, 2016
What happens when you add two incredible things that go well together and prepare a new recipe? It results in epicness, such as Salted Caramel Mocha. So when Venmo (with its popularity with millennials) and Paypal/Braintree (with lots of merchant relationships) are put together, the result has to be awesome.
It's a product line expansion that was truly overdue. Venmo was bought by Braintree which, in turn, was bought by Paypal; and to me, just the kind of talent they have amassed is incredible. So with this update, Venmo expands from being a P2P payments product to an in-app purchases product. The company today announced partnerships with sports ticket app Gametime and food delivery app Munchery—both will now use payment info stored in Venmo to let users buy tickets or order meals.
The first thing that strikes me and several others is that Venmo has made it a limited rollout. Why?
Their website says, "We've emailed everyone who can start using Venmo to pay in select apps. Didn't get an email? Right now, we're limiting availability, but stay tuned—we're adding users regularly, and will let you know when you can start paying!"
Going first with in-app purchases makes a lot of sense given how Apple Pay has performed so far. There is a demand for paying in-app with methods such as these while at the physical retail store people are still not convinced about proximity payments. This makes Venmo a mobile wallet—a graduation from just a P2P offering.
Venmo will compete with Apple Pay and Samsung Pay in many ways. I suspect their merchant base (especially apps/online) could grow much faster because of Braintree. It's not the first time that a product that is loved by users for P2P payments is getting into commerce enablement. We have seen examples like these elsewhere in the world, such as PayTM in India. What's interesting is that Apple Pay will take a very different path; it will go from commerce transactions to P2P payments soon.
Like the Paypal button, we could start seeing a "Pay with Venmo" button everywhere. The advantage is that a user who uses the Venmo app won’t have to plug in their credit card info; instead, they will simply sign in and pay with their Venmo wallet.