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Benmo, long-term centerpiece PayPalAlthough it is a growth story of the company, the often criticism of lack of monetization is becoming a bigger contributor to the business.
Paypal said on Tuesday in its first quarter revenue release that Venmo’s revenue rose 20% year-on-year in the first quarter, but the company did not provide a dollar figure. PayPal acquired Venmo in 2013 through the acquisition of parent company Braintree.
It was a popular consumer service for sending money to friends, but Venmo’s ability to promote meaningful revenue was a major question mark for investors, especially as a competition from Zelle, Zelle and Rivals. square Cash is being strengthened.
Venmo’s total payment volume has increased by 10% over a year ago, but revenue has grown twice as fast, reflecting business opportunities. Venmo only makes revenue from certain products such as online checkout, Venmo debit cards, and Pay with Venmo with instant transfers, but not from peer-to-peer payments.
Prior to reporting revenue, Jeffries analysts noticed that Venmo’s revenue growth appears to be “surged sharply,” flagging the increased contribution to brand checkout as an important area to look at. Similarly, Compass Point analysts said that, despite the fierce competition between Zel and Square Cash, Venmo traction with debit cards and online checkouts could “open new monetisation streets” if the adoption trend continues.
The company added roughly 2 million first-time PayPal and Venmo debit card users in the quarter, adding more than 60% of debit card payments across PayPal and Venmo. Meanwhile, the volume of Venmo transactions saw a salaries skyrocketing 50% year-on-year, with the number of monthly active users of Venmo debit cards increasing by around 40%.
PayPal reported better revenue than expected for the quarter, but missed revenue. The company reaffirmed its year-round guidance, citing macroeconomic uncertainty.
Watch: PayPal CEO Alex Chriss: Great opportunity to reach consumers and support small businesses
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