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PayPal Sets Ambitious Goals for Venmo as Part of Overall Growth Strategy
At PayPal’s inaugural investor day in four years, CEO Alex Chriss aims to communicate a transformative vision for Venmo that extends beyond just social payments. Taking the reins in September 2023, Chriss outlined a strategy to rejuvenate the company’s performance, emphasizing Venmo’s potential to generate over $2 billion in revenue by 2027. The last reported revenue figure for Venmo stood at approximately $900 million in 2021.
Under Chriss’s leadership, the focus is on reversing a downward trend that has seen PayPal’s market capitalization plummet by over 80% between mid-2021 and late 2023. With Venmo boasting a user base of 90 million in the United States, it has become a cultural phenomenon synonymous with peer-to-peer money transfers. However, monetizing these transactions has proved challenging due to the low revenue generated from them.
As competition heats up from platforms like Block’s Cash App, Zelle, and Apple Pay, which offer seamless banking integrations and a wider array of financial services, PayPal’s approach involves actively promoting user engagement. The goal is to position Venmo not only as a preferred method for personal transactions but as an all-encompassing financial app that simplifies spending and saving—what the company terms the “go-to money movement app.”
This strategy includes heightened emphasis on its debit card, initiatives to boost in-store purchases, and efforts to engage more merchants in utilizing the “Pay With Venmo” feature. By enhancing the utility of the app, PayPal aims to increase transaction volumes, yielding greater profits while providing consumers with incentives to maintain higher account balances and utilize Venmo for more transactions.
The early signs of progress are promising. The number of monetized monthly active users grew by 24% in 2024, and PayPal anticipates a mid-single-digit annual growth rate for Venmo’s user base through 2027. The company expects Venmo’s debit card payment volume to increase at a compounded annual growth rate of over 20%, with “Pay With Venmo” expanding at an even faster rate.
Chriss has shifted the company’s focus back to transaction margins, which had diminished in 2022 and 2023 but rebounded in 2024. During investor day, he detailed long-term financial goals, which include achieving high single-digit growth in transaction margin dollars and low-teens per-share earnings growth by 2027.
In an effort to broaden Venmo’s appeal beyond consumer transactions, PayPal has formed partnerships with notable brands such as DoorDash, Starbucks, and Ticketmaster. Recent reports from PayPal indicate that merchant adoption of the “Pay with Venmo” feature surged by 50% year-over-year. Additionally, Instacart and MoonPay joined as recent partners, while JetBlue has made strides by becoming the first airline to accept Venmo for flight bookings.
“We are still in the early phases of monetizing Venmo, but our established strategies are resonating well with our customer base,” Chriss stated during the earnings call. “This instills confidence in our direction as we look toward 2025 and beyond.”
WATCH: CNBC’s full interview with PayPal CEO Alex Chriss
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