NASDAQ reported on the appeal of P2P payments for younger consumers and how Venmo in particular have captured this market:
“Enter Venmo, PayPal’s less formal, mobile “peer-to-peer” payment app that allows for quick transfers of money between family and friends. Its convenience and accessibility makes it perfect for Millennials and younger generations who want to make casual transactions, like paying back a friend for lunch or a ride.
Another benefit of Venmo for users is that there are no transaction fees, while PayPal charges a 2.9% fee for all debit and credit card transactions.
Regarding Venmo’s Millennial demographic, PayPal CEO Dan Schulman stated in an interview with “Mad Money” host Jim Cramer, “It’s very important to them if they have their own independence, and these apps like Venmo are incredible powerful in helping and empowering them take care of their financial health.”
The market of consumers born in the 1980’s to mid-1990’s is not just important for Pay Pal to continue to grow Venmo transactions, but also to gain insight to what is motivating this particular, very large demographic which is background that is important far beyond just P2P transactions:
The app is a valuable asset for PayPal to fight stagnation, target younger generations, and tap into the high-growth potential mobile payment market. It may not the primary source of PayPal’s revenue yet, but it could be a crucial part of the company moving forward.
What is yet to be seen is if Venmo and similar fintech P2P solutions can only attract a particular age segment. Will Millennials out-grow Venmo and as they age, will users be more interested in solutions that offer focus on data privacy and security? Will Venmo adapt to the needs of its user base? Stay tuned.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group