Six years after being acquired by PayPal, the cherished app of millennials is finally generating solid revenue for its larger, older, less cool parent company. Within a few quarters, it may even break even, according to PayPal CFO John Rainey.
Venmo’s early popularity was probably fueled not only by its social function and dead-simple mobile interface; it also was free. That’s still mostly true, but a year ago, it launched an Instant Cash Out option: For a fee of 1%, customers can now instantly withdraw from their Venmo balance and return the funds to their bank account, rather than wait for one to three business days for the transaction to clear. And, “surprising no one” as Payment Journals.com put it, Venmo launched a Venmo debit card last summer, several months after making it possible to venmo millions of merchants, like Uber, GrubHub, Abercrombie, or Hollister, and not just friends. Together, these fee-based services have created a projected revenue run rate of $200 million for PayPal, with 29% of Venmo transactions now “monetizable,” up from 24% last quarter