Venmo, the PayPal-owned mobile app best known for peer-to-peer money transfer, is morphing into a full-fledged digital wallet. As of yesterday, any mobile website that accepts PayPal will also accept Venmo as a form of payment. That makes Venmo a viable checkout option at over 2 million U.S. retailers, including Foot Locker and Forever 21.
Venmo, which processed $8 billion in transactions last quarter, remains small relative to its parent company. But it benefits from a young and loyal audience that is attractive to retailers.
Convincing those users to “pay with Venmo” will be critical to the app’s ability to monetize. PayPal will charge retailers a fee for Venmo transactions, and has also expressed interest in using Venmo’s social feed as a vehicle for retailer promotions.