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This disruption affected services like payments, withdrawals, express checkout, cryptocurrency transactions, Venmo, and Xoom for thousands globally. Users reported difficulties logging in, sending or receiving money, and accessing linked bank accounts. Merchants encountered increased HTTP 500 errors during REST API calls, hindering payment processing and potentially losing revenues.

Venmo offers a debit card with Mastercard that lets customers use their Venmo balance as a de facto checking account. It also added accounts for 13- to 17-year-olds鈥攇iving it a head start on solidifying financial relationships with younger customers. Venmo more than doubled its user base from 2019 to 2023. Apple Savings passed $10 billion in deposits in August, just four months post-launch.

And alternative banking services like PayPal, Cash App, and Venmo have allowed customers who may not have qualified for bank accounts鈥攐r who have felt intimidated by account-opening processes鈥攖o use basic banking services. What this means for banks: Account opening growth will remain stagnant over the next few years, in part due to the shrinking unbanked population.

Venmo and PayPal are already doing this. Sources. Axios. Block. Cash App. Federal Deposit Insurance Corporation (FDIC). Federal Reserve Bank of San Francisco. Hindenburg Research. LendingTree. McKinsey & Company. Morning Consult. Payments Dive. PayPal. Paze. Pew Research Center. Reuters. The Verge. United States Senate. Venmo. Visa. Zelle.

Making Venmo profitable. One tool PayPal is using is the Venmo Debit Card. In Q3, monthly active debit card accounts grew 30% YoY. But that鈥檚 just 5% of active Venmo accounts, showing room for growth. We forecast US Venmo users will total 76.4 million in 2025. PayPal is also monetizing the P2P app with Pay with Venmo.

The news: PayPal-owned Venmo will launch accounts for children ages 13-17 next month, per The Verge. Venmo Teen accounts will let teens send and receive money via the app and include a debit card. Here鈥檚 how it works: Venmo Teen accounts come with parental safety controls. Parents or legal guardians sign up for the Venmo Teen account on behalf of their children.

The news: PayPal and Venmo credit and debit cardholders can now add their cards to Apple Wallet, per a press release. Why it matters: PayPal outlined how expanding its relationship with Apple benefits their 鈥渕utual customers鈥� in its Q3 2022 earnings. PayPal added Apple Pay as a payment option for its Advanced Checkout in April.

Their digital fluency means they prioritize a good app experience that includes popular payment methods like Venmo, PayPal, and Apple Pay. Educate Gen Zers about the purpose of insurance. Only 26% of Gen Zers have functional knowledge about the value of insurance, per a January 2023 TIAA Institute survey.

Zelle and Venmo operate in the same space and dwarf Cash App by P2P transaction value, per Insider Intelligence forecasts. Venmo has also expanded its features, although it appears to be targeting younger users. Making users view Cash App more like a bank will be exceedingly hard. Even with new services and a more established brand, reputational change will take time and meaningful investment.

But these users are already loyal to their preferred P2P app, with the industry dominated by Venmo, PayPal, Zelle, and Cash App. And feature innovation in digital wallets is making consumers even more attached to their preferred wallet. For example, new features like PayPal鈥檚 digital smart receipts and package tracking create more use cases for the app, boosting user loyalty.

More discounts: While TikTok Shop is yet to announce its Black Friday plans, it is rolling out exclusive deals that shoppers can access in the back half of the Cyber Five (November 30 to December 2)鈥攑rovided they choose Venmo as their checkout method. First-time TikTok Shop buyers will get a 25% discount on purchases of $45 or more, and up to $20.

Venmo, owned by PayPal, has continued to build out its Venmo Pay partnerships with companies like Live Nation (parent company of Ticketmaster) and Amazon. Block鈥檚 Cash App has focused on building out its in-store integrations and is now adding BNPL technology to its platform. But do any of them have what it takes to build out a super app? Apple might.

In its latest accounts for the first quarter, the peer-to-peer total payment volume (TPV) for PayPal, Venmo, and Xoom increased 2% to $91 billion, although it鈥檚 not possible to tell if Xoom contributed to growth. Why sell Xoom? PayPal has endured a challenging 2023. It embarked on major cost-cutting reforms, including laying off 7% of staff.

PayPal has also tried to grow Pay with Venmo to monetize the peer-to-peer (P2P) app. Our take: Cash App Pay already has a long way to go to catch up to established competitors like PayPal, but the crowded field of buy buttons will make it even harder for Cash App Pay to gain significant adoption.

P2P payments platforms Cash App and Venmo are also under fire over fraud concerns. Firms can harness fraud-fighting tools: Jack Henry and other B2B payment firms can win new clients through their technology鈥檚 fraud-preventing potential. Companies that embrace this tech can bolster their reputations and attract new users who may be concerned about the risk of fraud on P2P payment apps.

PayPal owns Venmo. Venmo has so much data. I wonder if in the future we're going to see PayPal do anything with Venmo, serving ads on Venmo, serving ads through data on Venmo, finding ways to codify the different emojis people put in their Venmo payments as descriptions of what they are buying to get actual insights from it.

Why it鈥檚 important: Mobile P2P payment providers like Venmo and Cash App will need to find new ways to boost growth if P2P payments have found a limit. They could shift their marketing to focus on other products in their mobile wallets, like their point-of-sale payments and buy now, pay later services.

Venmo recently added crypto transfers to other users and external wallets. PayPal launched this feature last year. And through a partnership with Visa+, PayPal will let Venmo and PayPal users to transact with one another later this year. Braintree. Braintree contributed greatly to PayPal鈥檚 transaction growth in Q1 and will be a vital part of PayPal鈥檚 business.

Upgraded Venmo Business profiles. The change will help small businesses improve their discovery by adding subscribe options, profile rankings, and the ability to offer promotions in their profiles. This could help consumers find local small businesses endorsed by their networks. Why it matters: PayPal is on a journey to reinvigorate slower-than-anticipated growth.

While it鈥檚 late to a game dominated by Apple Pay, PayPal, and Venmo, Paze will quickly build a foundation that poses a threat. Onboarding is backed by bank issuers. Paze can access over 150 million consumer credit and debit cards held by the seven banks that own it.

Providers are leaning in: Cash App offers teen accounts with a limited set of privileges, and Venmo will debut similar accounts this summer. Reaching Gen Z and Gen Alpha through their parents鈥攁nd then onboarding younger users鈥� social groups鈥攃an fuel gains. But lack of trust in mobile P2P apps is stifling user growth.

The key selling point, of course, is access to 400 million PayPal users, 90 million Venmo accounts, and millions of Honey users鈥攃ombined with data from 225 billion transactions across millions of merchants. PayPal is touting the ability to reach consumers throughout the entire shopping journey, along with its closed-loop attribution for advertisers, as factors that will drive success.

PayPal鈥檚 share of older digital payment app users is especially higher than other apps, like Apple Pay or Venmo: 87% of Gen X respondents use PayPal, but just 16% use Apple Pay, according to the survey.

PayPal, for example, plans to tighten Venmo integration this year, while Zelle鈥檚 parent company Early Warning Services is exploring a retail ecommerce wallet.