Paypal announced during its earnings call, that it would begin to monetize Venmo through a new feature named “Pay with Venmo.” Venmo, which is currently free for P2P transfers, can now be used for payment at any PayPal merchant. Venmo will make the same fee on transactions as PayPal does.
Venmo processed $2.1 billion of its total payment volume, up from $1.6 billion last quarter. A year ago it was doing less than a billion in transactions. The company says this growth makes Venmo “one of the fastest growing apps in the world by dollar volume.” PayPal hasn’t developed Venmo much since acquiring the Braintree subsidiary, likely because it wasn’t contributing meaningfully to PayPal’s overall revenue (Venmo only charges a fee when you pay with a credit card, otherwise it’s a free service). But Venmo has an opportunity to earn its keep at PayPal, thanks to its popularity with millennials.