Venmo, long popular for splitting bills and gifts among friends, is evolving into a broader consumer commerce platform. Owned by PayPal, the service announced several updates on Wednesday aimed at transforming Venmo into a full-service fintech tool for everyday spending.
Key enhancements include upgraded rewards for Venmo Debit Mastercard users and expanded payment options at major retailers. These moves are part of a brand campaign positioning Venmo, which boasts over 64 million monthly active users, as more than just a payments app.
“We’re transforming from a payments app into a full-service commerce experience for users to spend their balance on everything, in-store and online,” said Diego Scotti, EVP and general manager of PayPal’s Consumer Group.
Catching Up to Competitors
Venmo faces stiff competition in debit card adoption. Its debit card penetration remains in the single digits, compared to 44% for Cash App users, according to Bernstein. While Venmo’s debit card transaction volume hit $13 billion in 2024, Cash App’s soared to $152 billion.
PayPal is aggressively pushing to close this gap. CEO Alex Chriss highlighted that more than 45% of U.S. branded checkout now runs through PayPal’s upgraded experience, with continued growth expected as it expands in Europe. Nearly two million new users activated PayPal or Venmo debit cards last quarter, a 90% year-over-year increase.
Venmo’s revenue rose 20% year-over-year, though PayPal did not specify amounts. Total payment volume increased 10% to $75.9 billion. Transaction volume via Pay with Venmo climbed 50%, and monthly active users of the Venmo debit card grew about 40%.
Chriss has prioritized monetizing acquisitions like Braintree and Venmo, with major brands such as DoorDash, Starbucks, and Ticketmaster now accepting Venmo at checkout, integrating the app deeper into consumer spending habits.
Challenges and Market Shifts
Despite growth, Venmo and Cash App have lost share in U.S. peer-to-peer payments as Zelle’s volume surged to 66%, up from 55% in 2019. Venmo’s market share declined from 21% to 19%, underscoring the need to expand beyond basic transfers.
Venmo is betting on its strong brand, social roots, and loyal, younger users to drive wider adoption.
The updated Venmo Debit Card now offers 15% cashback at popular retailers including Sephora, Walmart, Lyft, McDonald’s, and Walgreens, with offers activated directly in the app. Cardholders can also enjoy tap-to-pay in stores, international purchases with no foreign transaction fees, and auto-reload features for low balances.
Venmo has broadened its checkout footprint, now accepted at TikTok Shop, Uber, Instacart, Domino’s, and more. This growing network aims to establish Venmo as a preferred payment method, especially appealing to consumers seeking convenience and rewards.
What The Author Thinks
Venmo’s pivot from peer-to-peer payments to a broader commerce platform is essential for its future growth. While the brand’s social appeal remains strong, the company must expand its utility to stay competitive against Cash App and emerging fintech players. Offering richer rewards and wider merchant acceptance are smart moves, but sustaining momentum will require continuous innovation and user-centric features to capture a bigger share of daily consumer spending.
