Sunday , July 14, 2024

Looking to Snag Millennials and Gen Zers, eBay Adds Venmo

EBay Inc. is recruiting Venmo as a payment option, the big e-commerce marketplace announced early Thursday. The move, which comes about a week after eBay announced it will no longer accept American Express cards effective Aug. 17, is part of a strategy to add alternative payment options that appeal to younger online shoppers, the company says in a blog post. 

The addition of Venmo, a mobile payments service from PayPal Holdings Inc., is expected to appeal to Millennials and Gen Zers, two demographics with which Venmo is a popular payment option. The two groups are also considered the next growth market in commerce, payments experts say. Some 28% of Venmo users are Millennials and Gen Zers, according to eBay. In addition, more than 60% of eBay’s volume comes from mobile devices.

“The ability to pay with Venmo at checkout is a continuation of our mission to provide even more choice to our customers while tapping into a younger demographic with Venmo’s heavy adoption among Gen Z and Millennials,” eBay says in a blog post. “Venmo’s mobile platform is ideal for digitally savvy shoppers looking for a simple and fast checkout process.”

Online shoppers who link their eBay and Venmo accounts can check out without having to manually enter their payment credentials, eBay says. Venmo users will have the option to make purchases with their Venmo balance or with a linked debit card, credit card, or bank account. They can also opt to share information about the payment in the Venmo feed, a social-media site where users can write notes detailing the purpose of each payment.

For their part, sellers do not need to make any changes to their eBay account to offer Venmo as a payment method for buyers, eBay adds.

“Venmo remains a key priority for PayPal, and we are focused on continuing to improve its value proposition to both consumers and merchants this year and beyond,” a Venmo spokesperson says by email.

While the addition of Venmo gives eBay sellers a popular and cheaper payment option, the move is not seen as an attempt to recover potential lost sales when eBay stops accepting AmEx cards, payments experts say.

“I’m not sure that there’s a correlation between not accepting AmEx and starting to accept Venmo,” Thad Peterson, a strategic advisor for Datos Insights, says by email. “Venmo had 74 million users in January 2024, and that’s about half of the Amex user base worldwide.”

Peterson adds that Venmo is a digital offering, which makes it more conducive to driving low-friction online transactions than an AmEx card. “Venmo is also a mass-market offering vs. the more upscale Amex card,” Peterson says. “Venmo has been pushing their consumers to business capabilities and this clearly reinforces that.” 

Another factor likely to have played a role in eBay’s move to add Venmo is speed of payment, says Cliff Gray, principal at Gray Consulting Ventures LLC. “Faster payments matter to small and micro-merchants that sell high-dollar items because they get paid right away, which is a plus for their cash flow,” Gray says.

As for Venmo, the deal will likely give a big kick to volume, as eBay is the second most-visited e-commerce marketplace, behind only Amazon.com, according to payment experts.

“This makes me wonder what will be the next marketplace to add Venmo,” says Gray.

Check Also

FundKite Moves Beyond Business Financing With Its Launch of a Merchant Services Division

FundKite, a fintech that provides financing to small and medium-size businesses, has broadened its services …

Digital Transactions