Amazon Will Start Accepting Payment for Purchases Using PayPal’s Venmo from 2022

UTC by Tolu Ajiboye · 3 min read
Amazon Will Start Accepting Payment for Purchases Using PayPal’s Venmo from 2022
Photo: Depositphotos

Amazon reached an agreement with Venmo for customers to use the mobile payment platform as a checkout option on the e-commerce giant’s platform.

PayPal Holdings Inc (NASDAQ: PYPL) recently announced a new partnership with e-commerce giant Amazon (NASDAQ: AMZN) that sees Venmo users use the mobile payment service as a checkout option on the Amazon platform. According to PayPal chief executive officer Dan Schulman in a recent official statement:

“We’re thrilled that we are teaming up with Amazon to enable customers in the U.S. to pay with Venmo at checkout. Our third-quarter results show solid growth on top of a record year.”

According to reports, the deal will kick off from 2022 and offer Amazon shoppers more payment flexibility. Currently, Amazon primarily processes customers’ transactions via credit, debit, and gift cards. However, customers cannot use Venmo’s parent company PayPal to purchase items on Amazon. This is because PayPal is not as streamlined as Venmo, which functions as a bank account for some mobile users.

PayPal’s Q3 Report Preceded the Venmo-Amazon Initiative

The partnership announcement came amid PayPal’s third-quarter earnings call on Monday. The payment platform’s bottom-line fell short of expectations and its shares were down by approximately 5% in late trading. For the third quarter, PayPal’s revenue rose from $5.46 billion to $6.18 billion versus the $6.23 billion projections from analysts. In addition, PayPal realized $1.11 in earnings per share, after adjusting a host of expenses, including stock-based compensation. The company’s Q3 EPS represents an increase of $0.4 in earnings per share from a year earlier. Furthermore, it was also enough to beat Wall Street’s expectations which had EPS for PayPal set at $1.07 too.

PayPal generated $310 billion in total payment volume during the third quarter, which represents an increase of 26%. Meanwhile, analysts were expecting a total payment volume of $312.5 billion. By comparison, Venmo processed a total payment volume of $60 billion on its own, a 36% increase.

PayPal also addressed its holiday outlook with the Christmas season fast approaching and shoppers getting ready to splurge. The company touched on several factors that could impact its performance during the holiday period – for better or worse. These include pressure from its ongoing supply chain and preference for making payments in-person this time around. In addition, there is also the issue of eBay’s (an e-commerce consumer-to-consumer and business-to-consumer platform) continued transition to its own managed-payments system. eBay owned PayPal from 2002 to 2014 and outsourced payments and online transactions to the latter.

PayPal’s Projections for Q4 2021

PayPal is projecting a revenue range between $6.85 billion and $6.95 billion for the fourth quarter. In addition, the payments company also has a set target of $1.12 in adjusted earnings per share. By comparison, analysts had PayPal’s revenue at $7.24 billion and $1.28 in adjusted earnings per share.

PayPal’s chief financial officer John Rainey expressed optimism at the company’s performance so far for the fourth quarter. However, Rainey admitted that the company’s growth rates were still below prior expectations.

Business News, FinTech News, News
Tolu Ajiboye
Author Tolu Ajiboye

Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to demystify crypto stories to the bare basics so that anyone anywhere can understand without too much background knowledge. When he's not neck-deep in crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.

Related Articles