Two of the largest brands in tech are joining forces as it was recently revealed that PayPal would soon be letting its Venmo app be used for purchases on Amazon’s ecommerce platform. The partnership is expected to launch in 2022 and it would be a big boost for two brands that have both been hit by some fairly indifferent third-quarterly earnings reports.
The new project will only be available for Amazon customers based in the US, but it will be rolled out to the 80 million users of the Amazon website and mobile app. This means that millions of people will now be able to pay for goods from Amazon either direct from their Venmo balance or their linked bank account.
It comes at a time when the PayPal stock price had been suffering on the markets with a fall of as much as 4.36% in one day. November saw the value of PayPal stock fall as analysts expressed concern about how the payment provider would be able to cope with a growing number of potential disruptors such as Shopify which is launching its own payment platform. Overall, the share price of PayPal is down nearly 13% for the whole of 2021.
PayPal has long been known as being the leading global digital wallet brand. But with the likes of Apple Pay and Square now taking a larger share of the market, there are concerns about how PayPal will continue to hold the number one spot. Other payment brands such as Klarna have also found success with their ‘buy-now, play-later’ payment packages.
Similarly Amazon faced a tougher-than-expected third quarter of 2021. The ecommerce giant missed expectations as online sales slowed and concerns were heightened about how Amazon would cope with the ongoing supply chain crisis. With the Amazon stock price falling by over 10% in the third-quarter, the brand will be hoping to bounce back in the final part of the year. Thankfully the deal between Amazon and PayPal to introduce Venmo payments to the ecommerce platform should be very helpful for both parties in 2022.
A big boost for Venmo
The Venmo mobile payment service was launched back in 2009, and while it was acquired by PayPal in 2012, it has faced a long road to gaining widespread acceptance. The mobile app is available for Android or iOS devices, and it is commonly marketed as a kind of PayPal-lite as it’s primarily used for quickly sending money to family and friends, rather than buying goods and services online.
A recent study from Venmo found that 65% of its users bought more products online during the pandemic, and 47% of Venmo users would like to use the payment method for buying goods from ecommerce merchants. As such, the news that PayPal would be teaming up with Amazon to let the ecommerce giant take Venmo payments couldn’t be better timed.