Venmo, once seen as a popular peer-to-peer payment app with limited monetization, is becoming a more significant contributor to PayPal’s business. In its first-quarter earnings report, PayPal announced that Venmo’s revenue increased by 20% year over year, although the company did not disclose the exact revenue figure. This marks a notable shift for a platform often criticized by investors for its slow path to profitability, despite its widespread consumer usage.
Originally acquired by PayPal in 2013 through the purchase of Braintree, Venmo has long been a go-to app for sending money between friends and family. However, unlike some competitors, Venmo does not monetize standard peer-to-peer payments. Instead, revenue is generated through features such as Pay with Venmo at online checkouts, the Venmo debit card, and instant money transfers. The recent growth in these areas points to a clearer path for monetization.
During the first quarter, Venmo’s total payment volume grew by 10% compared to the previous year, while revenue outpaced that, growing at double the rate. This discrepancy between volume and revenue growth underscores the increasing effectiveness of Venmo’s revenue-generating services. Analysts had anticipated this shift, with several pointing to rising contributions from Venmo-branded checkout and debit card usage as key areas to monitor.
PayPal reported that nearly two million new users activated either PayPal or Venmo debit cards during the quarter. As a result, total debit card payment volume for both brands surged by over 60%. Venmo-specific metrics were also strong: Pay with Venmo transaction volume increased 50% year over year, and monthly active users of the Venmo debit card rose by approximately 40%.
Despite exceeding earnings expectations, PayPal fell short on overall revenue projections for the quarter. Still, the company maintained its full-year guidance, citing ongoing macroeconomic uncertainty. The performance of Venmo, however, offers a bright spot and a promising direction as PayPal seeks to diversify its revenue sources and reduce reliance on traditional payment processing.
With rivals like Zelle and Square Cash maintaining strong competitive pressure, Venmo’s expanding footprint in the debit card and online checkout space is positioning it for broader monetization. As adoption of these features continues to rise, Venmo may become a key growth engine for PayPal’s future.
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