Part of what makes mobile money transfer app Venmo so popular is that it’s free. But not for long. If the company wants to make money, it needs to start charging for its services.
According to Tuesday (Dec. 29) reports in Fortune, Venmo plans to start doing just that — but only with business users.
Venmo will begin charging corporate users of its P2P payment service in an effort to take advantage of the recent spurt in adoption of these services. The hope is that companies that need to get paid from customers or companies that need to pay their customers will be willing to pay for the service because it’s so fast, reports said.
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“Merchants are very excited about this because Venmo users post their transactions to their friends in the app, so it’s essentially a form of social advertising,” said PayPal Vice President of Consumer Product and Engineering Joanna Lambert in an interview. In other words, businesses are also likely to agree to pay for P2P payment services because, through Venmo, that payment will also be advertised on the app.
Reports said businesses will pay 2.9 percent of the transaction value to accept Venmo payments, plus a $0.30 charge.
“This has the ability to change the dynamic between a business and a customer,” said MasterCard Head of Global Personal Payments Barbara King in an interview with the publication. “It’s resetting expectations around how people get paid.”
MasterCard is one player that is also charging corporate customers to add a P2P payment tool to their own businesses, reports said.
P2P payment service providers have, so far, worked on gaining traction among consumers instead of focusing on earning revenue. It seems to have worked. According to Forrester Research, the industry will see $17 billion worth of payment transfers by 2019.