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Consumers accustomed to the PayPal and Venmo digital wallets from PayPal Holdings Inc. can now deploy them to make federal tax payments when using the ACI Payments Inc. service.
Announced Tuesday by parent company ACI Worldwide Inc., the service adds another digital tax payment option. And ACI Payments, which ACI acquired in 2013 when it was known as Official Payments Holdings Inc , is the first tax payment service to offer Venmo as an option for federal tax payments, ACI says.
“Consumer adoption of alternative payment methods (APMs) like PayPal and Venmo continues to grow,” Sanjay Gupta, ACI Worldwide head of biller segment, tells Digital Transactions News in an email. “Our ACI Speedpay Pulse consumer research tells us that more than 50 percent of Gen Z and Millennial consumers surveyed would consider paying a bill with a digital payment method like Venmo or PayPal if given the option. So, while these options are fairly pervasive for things like paying for goods and services and transferring money to friends and family, paying taxes is another use case taxpayers are seeing as an opportunity to use these [alternative payment methods].”
Additionally, the Internal Revenue Service’s Strategic Plan emphasizes improved service options for taxpayers. “This includes increasing the scope and accessibility of electronic payments services, simplifying the payment experience for all taxpayers, and launching new and enhanced filing and payment programs [that] promote electronic interaction,” Gupta says.
Using either PayPal or Venmo to make a tax payment is fairly straightforward. When selecting Venmo, taxpayers receive a QR code to scan using their Venmo app and select their preferred payment method, whether Venmo balance or credit or debit card, ACI says. With PayPal, taxpayers are taken directly to their PayPal login, where they can choose their preferred payment method and complete payments.
ACI says it has processed a total of more than $25 billion in IRS tax payments across a period of more than 20 consecutive years.
