Venmo’s app succeeded in becoming a ubiquitous way for young people to send money back and forth. It has been less successful at creating a sustainable business.
Dan Schulman, chief executive officer of Venmo parent company PayPal Holdings Inc., said that while it hasn’t happened yet, the app will make money someday.
“I have full confidence that we will monetise Venmo,” Schulman said at the Morgan Stanley Technology, Media & Telecom Conference. “We are clearly seeing the network effects of Venmo.”
On the same day, PayPal settled with the US Federal Trade Commission over allegations that Venmo failed to properly disclose that funds transferred by customers to their banks could be frozen or removed by the company. It also misled customers about privacy controls in the app, the agency alleged.
PayPal acquired Venmo in 2013. The service is popular with millennials, but PayPal has been pushing to expand its appeal and find ways to eke out a profit. PayPal announced that the peer-to-peer payments service can be used to make mobile purchases at more than 2 million US retailers in 2017. At the time, Chief Operating Officer Bill Ready said Venmo will be much more than a digital wallet used between friends but “also a ubiquitous digital wallet that helps consumers spend wherever and however they want to pay, regardless of device.”
Venmo handled $10.4 billion in payment volume in the fourth quarter, an increase of 86 percent year-over-year.
But competition for Venmo has been increasing, with more than 30 U.S. banks and credit unions working together on a service called Zelle.