Should You Use Venmo for Business? [Research]

Earlier this year, PayPal confirmed what many suspected: Venmo is more popular than several U.S. banks. 

More than 40 million people used the peer-to-peer (P2P) payment app between April 2018 and April 2019. For context, Bank of America reported an active user base of 37 million in Q1 2019. 

According to The Wall Street Journal, Venmo’s user base also surpasses that of many other FinTech apps, including Square. (That said, the Journal also reports that since each company measures “active users” differently, these aren’t apples-to-apples comparisons.)

It’s no secret that PayPal (which acquired Venmo) is bullish about its growth. Planned projects include a Venmo-branded debit card, instant transfer options from a user’s Venmo app to their bank account, and plans for a new credit card in partnership with Synchrony Financial. 

But Venmo’s core transactions consist of one-off payments between individual users. Less research exists to show how—or if—businesses use it as well. In 2017, GetApp surveyed 500 small and midsize (SMB) business leaders to learn how many use Venmo for business:

• One in three small business owners hadn’t heard of Venmo;

• 81% of small businesses were not using Venmo;

• 2% of small business owners used Venmo to manage customer payments…

• …but more than 10% had employees who used it outside of work.

With 2020 upon us, GetApp re-ran the same survey this past fall. (You can learn more in our Methodology section at the end.) As displayed below, Venmo gained brand awareness among business leaders—but that doesn’t mean they’re using it:

• 7% of respondents haven’t heard of Venmo

• 43% do not use Venmo at all

• 24% process customer payments using Venmo

• 18% have colleagues who use Venmo informally

As in 2017, most leaders we surveyed do not use Venmo to manage customer payments: 43% of respondents to this year’s survey reported not using it. Still, this number decreased from 51% of respondents back in early 2017. 

But nearly one in four (24%) did tell us they use Venmo for this purpose. Now, consider that just 2% responded this way to the same survey question less than three years ago. This growth shows that as more customers start to use Venmo, they expect the businesses they interact with to use it as well.

The uptick in using Venmo to process customer payments coincides with increased brand awareness among business leaders. In 2017, one of our most surprising results was that 30% of respondents said they didn’t know what Venmo is or does. In 2019, only 7% said they hadn’t heard of Venmo. 

This means that brand awareness and market education both increased in the time between surveys. It doesn’t surprise us: In Q1 2017, when we conducted our first survey, Venmo’s net payment volume totaled $6.8 billion USD. In Q3 2019, when we re-ran our survey, net payment volume equaled $27 billion USD at 64% year-on-year growth.

So, if you want to be where your customers are, using Venmo sounds like a strong idea.

Venmo offers person-to-person payments within North America. As of December 2019, it does not offer in-app payments to merchants or businesses, nor does it serve customers outside North America. 

Here’s what you can do: Accept Venmo as a payment option for customers to buy goods from your app or online store. 

When Venmo’s users make or receive payments in the app, they have the option of making those transactions public to fellow users. If you’re trying to boost brand awareness, setting up Venmo as a payment option could be a strong strategy. 

This article shares more details about how to use Venmo’s social commerce platform. You can also find more details about integrating Venmo via Braintree’s website. 

And if your business uses PayPal’s checkout process, you can allow your customers to select Venmo through PayPal’s online checkout process. Any merchant that’s already using PayPal can select this option. If you’d like to add it, you can learn more here.

If you’re selling to consumers, it behooves you to meet them where they’re at. In this case, an increasing number of them use Venmo. As you plan ahead for 2020, it’s worth considering how you can use Venmo for business.