In a market that is increasingly crowded due to peer-to-peer payments, Benmo is showing momentum, but cash apps are hitting rough patches.
Parents from both companies reported results this week for quarterly. PayPalI own Venmo and reported revenue beats and maintained forecasts for the year. blockMeanwhile, it plunged in an extension transaction on Thursday after a cash app parent missed income and issued disappointing guidance.
At the same time, the Venmo and Cash apps can eat up more consumers for peer-to-peer products, add services like debit, credit, transfer services, and more, and actually make money from those users.
For PayPal CEO Alex Chriss, who took over the struggling payments company in 2023, Venmo’s monetization is an important part of his turnaround plan.
PayPal didn’t provide a $1 figure, but Venmo’s revenues rose 20% in the first quarter from a year ago. PayPal noted that the adoption of features such as Venmo debit cards, instant transfers and integration into online checkout will be expanding. The company said that per-user monetization has been improved and that Venmo continues to play a role in a broader e-commerce push.
Venmo’s revenues increased by twice the total payments. This is a 10% increase and reflects progress in turning engagement into profits.
During the quarter, PayPal added nearly 2 million first-time debit card users across PayPal and Venmo, saying Venmo’s debit card payments rose by more than 60%. Card monthly activities increased by around 40%, while pay at Venmo Volume spiked 50%.
“We’re leaning against Venmo and our investments are beginning to pay off,” Chriss said in a company’s revenue call.
Block CEO Jack Dorsey hit a different tone on his company’s phone.
Cash App posted a 10% gross profit growth rate of $1.38 billion in the first quarter for a year ago. According to StreetAccount, the measure of total PayPal payments, or money going through the Square and Cash app, was $56.8 billion, missing an average estimate of $58 billion.
Dorsey acknowledged the recent failure of Cash App.
“I just don’t think we were focused enough and we were paying enough attention to our network and network density. That’s what we’re based on,” he said.
Dorsey pointed out that some users still don’t see the Cash app as a true banking platform. This is because experience with the app can feel limited or limited when you try to move or access funds. The company has been approved by the Federal Deposit Insurance Corporation and is currently promoting Cash App Remoll, a lending program that can bring in in-house services.
“Of course, we want to engage and borrow customers through banking services, and we’re sure we will do so,” Dorsey said. “But at the same time, we need to make sure that we continue to grow our network. It starts with peer-to-peer.”
Watch: Interview with PayPal CEO Alex Chriss
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