As of 11:50 a.m, PayPal stock (NASDAQ:PYPL) was up 6.7%. ET today, after Amazon’s announcement that Venmo will be available as a payment option to US consumers in time for Black Friday. In 2013, PayPal bought the peer-to-peer payment provider Braintree via the purchase of Braintree.
This is fantastic news for PayPal, whose stock has dropped 53% this year due to sluggish growth. Here’s what that may imply for the battered fintech stock.
So, What’s the Deal With PayPal Stock?
Venmo accounted for 18% of PayPal’s overall payment volume in the second quarter, although it has traditionally expanded rapidly. Over the last three years, Venmo’s payment volume has climbed at an annualized pace of 36%.
Venmo has had difficulty monetizing customers since the app allows users to freely transmit money from their cash balance. (The service charges a 3% fee on credit card transactions.) However, Amazon’s enormous client base might accelerate Venmo’s income contribution to PayPal.
So, What Now?
Venmo has added Dick’s Sporting Goods, DraftKings, Booking Holdings, and The Washington Post as new merchant partners, indicating that PayPal is gaining traction in this space. Signing up with Amazon is like signing up with hundreds of shops all at once. The tech behemoth controls 30% of the US e-commerce sector.
Adding new merchants is a significant income potential for Venmo. The app made $100 million in income in July alone, for a total yearly revenue of more than $1 billion. This follows a quarter in which the service’s commerce volumes surged by more than 250%.
With the price expected to decline sharply in 2022, growth expectations are low right now, so any positive news from Venmo about monetizing customers and contributing more income to PayPal stock (NASDAQ:PYPL) top line is a trigger to monitor.
Featured Image- Unsplash @ MarquesThomas
Author Okoro Chinedu 
