For consumers, paying for the goods they want is a necessary evil at best and a complicated task at worst (especially online). One reason payments companies are so eager to expand into other parts of the consumer journey is the frustrating nature of the transaction phase. McKinsey calls this embedded finance – when a financial product or solution is placed in a non-financial context, such as on a social media platform or in-store (personal account credit cards are an old-school example).
Embedded finance has become big business: McKinsey reckons the sector has arrived. 20 billion dollars By 2021 in the US only by revenue and potential. Double Next Three to five years.
With those kinds of numbers in the game, it’s no wonder the competition for the spot is fierce, and Retail is a central battleground.. and with 50% International spending that takes place online in the US, such as digital payment solutions Venmo And PayPal (which owns Venmo since 2013) are well positioned to take advantage of the opportunity.
As other payment solutions vary with many retailer rewards programs, browser extensions and creator marketplaces; What made Venmo successful in the first place is what helps it rise to the top of the embedded payment pile – community.
Dennis Leonard, VP and General Manager of Venmo spoke to them. Retail TouchPoints What sets Venmo apart from its competitors (including PayPal) in this hotly competitive space, and how the platform’s native social sharing features give it an edge.
Retail Touch Points (RTP): The world of payments is an exciting place right now – Tell us how Venmo is capitalizing on all this momentum.
Dennis Leonhard: Retailers now have to go into all these different channels, more than ever before, and it’s not just about the products – Consumers are looking for that seamless payment experience even with brands they trust. So Venmo stepped in and offered two different products to help both small and large retailers do just that.
Pay for Enterprise Solutions with Venmo Checkout, the integrated checkout button you’ll see at checkout like big businesses. Grubhubs and Elevatorworld s.
Then on the smaller side – for solopreneurs, casual sellers and users with a side hustle – we have Venmo business profiles. It enables people to do so by accepting payments for goods and services and beyond. Grow and market your business on the Venmo platform. Artists selling crafts at fairs, one-of-a-kind hairdressers, or street florists use these business profiles to interact on the Venmo platform and talk about all the cool stuff they sell. We started a little over a year ago, and we already have it. 1.5 million Small businesses with profiles.
Just accepting Venmo is seamless and easy, so People are using it and spending more.. We are seeing that they are indeed consumers. 90% They’re more likely to complete a purchase with Venmo over traditional payment methods, and we’ve found that Venmo users do. 2X more frequently than the average consumer and 19% They are more likely to make repeat purchases.
for example, InstalledA quick service restaurant that makes juice, one that has seen 57% Higher membership average order value through Venmo than traditional credit cards. Our merchants are seeing high conversion rates, and as a result We’re seeing a tremendous amount of volume growth in Venmo. – 250% per annum.
RTP: How does this all fit into the larger PayPal ecosystem, especially since the two brands have similar offerings — have you ever known you’re competing against yourself?
Leonard: The interesting thing about PayPal and Venmo is that our consumer infrastructure overlap is not one-to-one. We just have tens of millions of people with Venmo accounts. So the Pay with Venmo checkout button allows tens of millions of people who don’t have a PayPal account to seamlessly checkout Venmo instead.
PayPal also has its own small business solutions, however [those business profiles] I said just sit on the Venmo platform. Also, because of the way Venmo profiles interact with social feeds, those are unique. [attributes] That you can market businesses in Venmo that you can’t do on PayPal.
RTP: What consumer payment trends are you tracking as you look to keep Venmo ahead of the curve?
Leonard: (laughing) Sometimes I feel ancient because I was there before PayPal. American ExpressSo I spent more than ten years on this subject. I think it’s really interesting now that this social element is in places like pay-as-you-go. Instagram And tiktok, Being able to seamlessly purchase recommended products and making those payment solutions feel truly integrated. You’re getting pre-purchase and post-purchase recommendations in these slots, so I find it really interesting how you’re creating things together.
There’s always an opportunity to make payments as seamless and easy as possible and make them feel like part of the overall experience. Whether that’s through social platforms or traditional retailers, there’s still an opportunity out there.
What I also find interesting is the constants that are actually rising in Venmo. We’re seeing a ton of drag in places like this. Food supply, so Grubhub, Uber eats and DoorDash. We are seeing a lot of activity inside. road trip – Uber, Lyfts, Booking.com, is a new business for us – and around Entertainment, so Ticketmaster, AMC, FanDuel, DraftKings. And then it’s the last FashionSo for example Poshmark, Abercrombie and Fitch, Adjusting the seam.
All these merchants trying to go after millennials and Gen Z really see an opportunity to tap into Venmo’s consumer base to capture them. There is also a social sharing component similar to Venmo for all of these categories. If you’re thinking of going grocery shopping or splitting an Uber with your classmates, Sharing and the social aspect are all starting to become part of the transaction.
RTP: Venmo’s roots are in peer-to-peer payments, and that’s still a big part of the business. As you move into the enterprise space serving brands and businesses, how do you balance the needs of these two very different sets of customers?
Leonard: When we go out and talk to our Venmo user base, consumers’ love for Venmo comes out in almost every survey. They talk about how easy and fun it is to use and want more ways to use Venmo, so these [business] Solutions are an extension of that.
For example, I have a farmer’s market down the road that I go to every week. I know the first names of the presenters, they are almost friends at this point. In most cases, these small businesses become an extension of your friends and family, the next layer of your local community, so it’s a very natural extension. [for Venmo]. I mean, remember how much of a pain it was to get money for the foster?
And then on the checkout side, our consumers were asking to be able to use Venmo in more places, to be able to use their balance, to be able to pay seamlessly in other places, so it was a natural extension for us.
RTP: We know there are big payoffs in terms of conversion numbers and customer satisfaction when retailers offer these more convenient payment solutions, but there’s a tipping point where too many options clutter up that transaction time. With so much competition at the enterprise level, what is Venmo’s interest in major retailers?
Leonard: There are three things. One is the Venmo community, which is now available. 90 million Consumers in the US – One in three Americans has a Venmo account. We’re really part of consumers’ everyday lives, so there’s a built-in large audience. And secondly, what we’re seeing is that consumers, again, 90% They are more likely to complete a purchase with Venmo than traditional payment methods. People actually sign up and change at checkout because it’s seamless and easy. The third is the great interaction that happens in the Venmo app, where you can see your purchases and share them if you want.
RTP: What is Venmo’s ultimate goal on the business side, especially now that so much disruption is happening?
Leonard: Our number one goal is to be a truly simple and easy way for people to pay not just their friends and family, but their local businesses and brands they love. Essentially giving consumers more opportunities to use Venmo.
And not only online. We have both static and integrated QRC (QR Code) capabilities for merchants. Statistics are as simple as advertising cards you place in a store, on a market stand, or even around your neck if you’re selling, and it’s a static QR that formalizes your business profile. And then we have an integrated QRC solution that you can see in places like this. CVSWhere you can shop via PayPal or Venmo via integrated QR.
