In the competitive peer-to-peer payments market, Venmo is gaining traction, while Cash App is facing challenges. Both companies reported their quarterly earnings this week, with PayPal, owner of Venmo, reporting strong results, and Block, the parent company of Cash App, experiencing a sharp decline in its stock price after missing revenue expectations and issuing weak guidance.
Venmo has seen positive growth as it competes against Cash App for users. In the first quarter, Venmo’s revenue grew by 20% compared to the previous year, though PayPal did not disclose the exact figures. The company highlighted the growing adoption of Venmo’s debit card, instant transfers, and its integration into online checkout, all of which have contributed to its expanding revenue. PayPal noted that Venmo is playing an increasing role in the company’s broader e-commerce strategy, with monetization per user improving significantly. Venmo’s payment volume also rose 10%, reflecting continued success in converting user engagement into profit. Additionally, PayPal saw strong growth in Venmo debit card usage, with more than 60% increase in card payment volume and a 40% rise in active monthly card users.
PayPal CEO Alex Chriss expressed confidence in Venmo’s role in the company’s turnaround strategy, emphasizing that the investments in the platform are beginning to pay off.
In contrast, Block, the parent company of Cash App, is struggling with underperformance. Cash App reported a 10% increase in gross profit, reaching $1.38 billion in the first quarter, but its total gross payment volume of $56.8 billion fell short of analysts’ expectations. CEO Jack Dorsey acknowledged that the company had not focused enough on its network, which is essential to its growth, and admitted that some users still do not consider Cash App to be a true banking platform. Cash App has been promoting its new lending program, Cash App Borrow, which was recently approved by the Federal Deposit Insurance Corporation. Dorsey believes this service will help deepen customer engagement and foster network growth, but he also emphasized the importance of continuing to expand Cash App’s peer-to-peer capabilities.
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