Amazon Drops Venmo in Another Setback for PayPal

After just 14 months, Amazon has decided to stop allowing its customers to use Venmo as a direct payment option. Amazon didn’t give a reason for the decision, noting simply that its customers still have nearly a dozen payment options to choose from. Venmo’s website says, “Venmo will remain available to users who currently have it enabled in their Amazon wallet until 01/10/24.” It’s also no longer possible for users to add Venmo as an Amazon payment option.

Amazon first announced it would start accepting Venmo in October 2022. At that time, both parties said the partnership would give users a new way to quickly make purchases on the retail giant.

“We want to offer customers payment options that are convenient, easy to use, and secure—and there’s no better time for that than the busy holiday season,” Max Bardon, Vice President of Amazon Worldwide Payments, said in a statement at the time. “Whether it’s paying with cash, buying now and paying later, or now paying via Venmo, our goal is to meet the needs and preferences of every Amazon customer.” Bardon has since left Amazon.

While there was no reason given for the Venmo cancellation, Yahoo News speculated that it could have resulted from a “lack of traction.” But a slow start to usage wouldn’t explain why Amazon would drop the payment service altogether.

At this point, Amazon does not accept direct payments from PayPal, either. Nevertheless, a Venmo spokesperson issued a statement saying: “We have a strong relationship with Amazon and look forward to continuing to build on it.”

Trouble for PayPal

This is yet another blow to PayPal, which has struggled to find its footing recently. The company’s stock has lost 21% of its value over the past year, and 69% over the past two years. It has also faced competition from Stripe, a rival payment processor, which has filed paperwork toward an IPO and has been bolstering its relationship with Amazon.

PayPal brought on a new CEO, Alex Chriss, in September, who has been trying to solidify its relationships with key players in the technology and financial services sectors. One of Chriss’ first achievements had been an agreement with another tech giant, Apple. In early October, PayPal announced it was letting customers add their PayPal or Venmo credit and debit cards to Apple Wallet. PayPal also introduced a stablecoin earlier this year, which led to a subpoena from the SEC.

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