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Finovate Blog
Tracking fintech, banking & financial services innovations since 1994
PayPal is launching Tap to Pay on Android for U.S. Venmo and Zettle business users.
The new capability will enable merchants to accept contactless payments without additional hardware.
All Venmo business users will have access to Tap to Pay in the coming months.
PayPal has been on a quest to improve the checkout experience since its launch in 1998. The California-based company is continuing that journey today by rolling out Tap to Pay on Android for the U.S. business users of two of its subsidiaries– Venmo and Zettle.
The new capability enables merchants to accept contactless payments on their Android mobile devices without additional hardware. After a short onboarding process, Venmo business users can use the Venmo app to manage funds received via both Venmo and card. Regardless of the transaction type, all funds will settle into the business’ Venmo account to facilitate cash flow management.
“Tap to Pay is the last milestone in the democratization of in-person card payments, where users can start taking card payments with no setup cost in a matter of minutes,” said PayPal Head of Product, Microbusiness Ed Hallett. “We’re unlocking access to this capability for the millions of businesses using Venmo and PayPal Zettle, helping them drive sales with frictionless payment options.”
All Venmo business users will have access to Tap to Pay in the coming months, but the new capability is also currently available by request.
PayPal-owned Zettle first launched Tap to Pay on Android for Zettle users in the U.K., Sweden, and the Netherlands last May, and has since rolled out the technology for Zettle users in more regions– including in the U.S.
While Apple unveiled Tap to Pay on iPhone last April, Stripe was the first company to bring the technology to merchants with Android devices. The payment service provider launched Tap to Pay in February of this year for merchants in the U.S., Canada, the U.K., New Zealand, Australia, and Singapore.
PayPal-owned Venmo is continuing its journey into DeFi this month. Late last month, the California-based company unveiled a new peer-to-peer crypto transfer capability. The new feature enables users to transfer crypto to friends and family using Venmo, PayPal, and external wallets and exchanges.
Venmo first introduced crypto to its users in 2021, but the capabilities were limited. Within the Venmo app, users could only buy, hold, and sell cryptocurrency. This month’s development adds to the company’s crypto wallet capabilities, rounding out the utility from saving and investing into spending and giving.
The company reports that, over the past year, more than 74% of its crypto customers have continued to hold crypto in their accounts. “In addition,” today’s announcement said, “since the beginning of 2023, nearly 50% of customers with existing crypto balances have added to their crypto holdings on Venmo.”
To send their crypto to friends and family, customers use the Crypto tab within the Venmo app and use the transfer arrows to transfer a select amount of their crypto to a Venmo account, or to a recipient’s PayPal wallet address or other external wallet. To receive crypto, users show their unique crypto address QR code with other users.
Select Venmo customers will have the ability to send crypto transfers starting this month. The company will roll out the new capability to more users over the coming months.
PayPal will enable Apple users to log in to their accounts with passkeys rather than passwords.
PayPal also announced that Amazon had authorized Venmo as a payment option.
PayPal made its Finovate debut more than a decade ago at FinovateSpring 2011.
Two days in and it’s already been a pretty good week for PayPal.
On Monday, the payments innovator announced that it had teamed up with Apple. The partnership will enable Apple users to log in to their accounts using a passkey rather than a password. Developed by the FIDO Alliance and the World Wide Web Consortium – along with Apple, Google, and Microsoft – passkeys use cryptographic key pairs. These key pairs consist of a public key that is stored in the cloud and a private key that is stored on the users’ device.
This authentication method has a number of advantages. The fact that the keys are separated means that if a cyberattack compromises a given server, the attacker will not be able to access account credentials. It also makes it harder for individuals to share authentication data between different platforms – a significant challenge for password-based systems, as companies like Netflix have learned.
The passkeys are available for iPhone, iPad, and Mac users. PayPal says that it will bring passkeys to other platforms as support is available. U.S. customers will be able to use the passkeys this week. Other markets likely will be able to access the technology early next year.
Today, PayPal added to its roster of Big Tech partners with news that Amazon will enable its customers in the U.S. to pay with Venmo on both Amazon.com and on its mobile app. Available to “select Amazon customers” today, the ability to pay with Venmo will be available to all customers in the U.S. by Black Friday – November 25th, the notorious shopping day after Thanksgiving.
Launched as a free service in 2009 and owned by PayPal since 2013, Venmo traditionally has been a convenient way for friends and family to transfer funds to each other. Last year, Venmo facilitated $230 billion in transactions. But increasingly, merchants ranging from Shopify to Lululemon have embraced the popular payment solution as a way to pay for retail goods and services. With today’s announcement, Amazon users will be able to add their Venmo accounts as an Amazon payment option and to select Venmo as their payment preference at checkout.
“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,” Amazon Worldwide Payments VP Max Bardon said. “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.”
Venmo Purchase Protection is available on all eligible transactions. Amazon’s A-to-Z Guarantee applies as well in the event of an issue with an order. Nearly 90 million consumers in the U.S. actively use Venmo.
Finovate audiences were introduced to Venmo in 2013 by Braintree. The company bought Venmo the previous year for $26 million, and demoed its Venmo Touch solution at FinovateSpring 2013. Braintree was acquired by PayPal later that year for $800 million. PayPal made its own Finovate debut at FinovateSpring in 2011.
PayPalannounced this week it is partnering with online retail giant Amazon. Under the agreement, PayPal’s Venmo will be listed as a payment option for U.S. Amazon shoppers online and in the Amazon mobile app. Venmo’s 80 million users will have the option to pay with their Venmo balance or their Venmo-linked bank account.
Venmo SVP and GM Darrell Esch explained that the new integration enhances the versatility of users’ Venmo accounts. “Over the last year, we have focused on giving our Venmo community more ways to use Venmo in their daily lives, including the ability to pay with QR Codes and providing more shopping features like purchase protections,” he said.
The new payment capability will come at a good time for Venmo users. According to the press release, 65% of Venmo users increased their online purchasing behaviors during the pandemic and 47% are interested in paying with Venmo at checkout.
Amazon will also benefit from providing an additional payment option for its customers. “We understand our customers want options and flexibility in how they make purchases on Amazon,” said Amazon’s Director of Global Payment Acceptance Ben Volk. “We’re excited to team-up with Venmo and give our customers the ability to pay by using their Venmo accounts, providing new ways to pay on Amazon.”
The move likely won’t help Venmo win any new users from Amazon’s 300 million active user base, however. That’s because most Amazon shoppers have already entered their preferred payment method into their Amazon Wallet, which currently allows for credit cards, debit cards, store cards, checking accounts, HSAs, FSAs, and EBT. And because Amazon is an expert at making payments disappear into the background of the user experience, most users don’t think about adding a new payment method unless their is an issue with their current one.
There is no exact date as to when Venmo will be integrated into Amazon’s checkout flow, however PayPal said it “will be available in 2022.”
Venmo has been around since 2009 and is known for its popularity among Millennials as a peer-to-peer payment app. Over the past couple of years, however, the New York-based company has proven that it does more than just help 20-year-olds exchange $15 and pizza emojis. Earlier this year, Venmo launched a check cashing feature that enables users to cash paper checks in the Venmo app. The company also offers debit and credit cards, as well as a crypto offering that allows users to buy, sell, and hold cryptocurrencies.
Venmo‘s new launch is making it easier for users to deposit their paper stimulus checks. The PayPal-owned company unveiled a new feature called Cash a Check that enables users to do just that– cash paper checks in the Venmo app.
Eligible users can take a picture of their check, Venmo reviews the check, and the funds are usually approved within seconds and available in the user’s account in a few minutes (though the company disclosed the approval may take up to an hour).
“We know that with health and safety top of mind for many, having a safe way to access stimulus payments is essential for many of our customers, especially those who are receiving paper checks and traditionally would have to visit a physical check-cashing location,” said Venmo SVP and CM Darrell Esch. “By introducing the Venmo Cash a Check feature, we are not only enabling our customers to access their money quickly and safely from the comfort of their own homes but are also waiving all fees for cashing government issued checks to ensure customers can use their stimulus funds to pay for the things they need most.”
Users should not expect to be able to deposit the check they received from their grandma for Christmas, however. The initial launch is limited to printed payroll and government checks. In fact, the launch seems to focus on helping users cash their stimulus checks.
As Esch noted, fees for depositing government-issued checks will be waived for a limited time, until Venmo has cashed a total of $400,000 in government-issued checks. After that point– and for printed payroll check deposits– users face a fee of 1% to 5%, depending on whether the signature is hand-signed or pre-printed.
The steep fees are owed to the risk associated with remote deposit check capture. In addition to the risk of fraud, Venmo now exposes itself to costly human errors, such as unintentional efforts to deposit a single check multiple times.
Today’s launch is the latest effort in a series of moves Venmo has recently made to compete with the rise in challenger banks. Last October, the company launched a credit card offering and, a few months earlier, unveiled a new tool to help micro-businesses accept payments.
Venmo is one step closer to being a full-service bank competitor with today’s news. The PayPal-owned company is rolling out a credit card offering that is available to select customers starting this week.
The Visa-branded card, which is issued by Synchrony Bank, offers many features one would expect to pair with a mobile-first account, such as an app-based virtual card for online shopping, tools to track spending and rewards, and the ability to pay off the card balance from within the app. The cards, which pander to a mostly millennial user base, also offer five unique color designs.
One feature specific to Venmo’s new credit card is the use of a QR code printed on the card. Similar to Venmo accounts, users can scan their friends’ unique QR code to send or request money. This QR code technology, along with an embedded RFID chip that enables users to tap to pay, provides an (almost) contactless payments.
Another unique feature is the way the Venmo card handles rewards. Instead of offering a pre-determined rewards category or even allowing users to choose which category they’d like to receive rewards for, Venmo rewards consumers based on the categories in which they actually spend.
To do this, the company separates customers’ spending into categories such as dining, travel, bills, health and beauty, grocery, gas, transportation, and entertainment. Venmo rewards users 3% cash back for purchases made in the category in which they spend the most, 2% cash back for purchases in the second-highest spending category, and 1% cash back on everything else. The rewards cash is automatically transferred to the user’s Venmo account at the end of each period.
The card adds to Venmo’s existing offerings, including a robust P2P payments ecosystem and its Mastercard-branded debit card launched in 2018. Venmo plans to market the new credit card to its 60 million active users, a built-in audience comprised of its target market.
Remember when the mobile payments game was first getting started? The industry was rallying around NFC as the technology of choice for mobile payments. Bluetooth low energy (BLE) was a close second, and QR codes were generally the last choice.
That was in 2012 and now it appears that 2020 is throwing us yet another curve ball– QR Codes are back in style in the U.S. That’s because PayPal has partnered with InComm to launch its PayPal and Venmo QR codes technology at pharmacy chain CVS.
This move will implement low-touch mobile payments at CVS’ 8,200 brick-and-mortar stores across the U.S., offering shoppers a secure payment experience without needing to touch a keypad or sign a receipt.
PayPal users can pay using stored debit or credit cards, bank accounts, their PayPal balance, or PayPal Credit. Venmo users can also pay using their stored debit or credit cards and bank account, but will additionally be able to tap into their Venmo balance or Venmo Rewards.
“In the midst of COVID-19, we have seen an incredible acceleration of digital payments and touch-free payments,” said PayPal EVP and CPO Mark Britto. “Companies of all types and sizes are looking for ways to maintain the safety of their customers and employees, especially through touch-free experiences like curbside pickup and enhanced online shopping. QR codes complement these and provide retailers an additional payment method that furthers this touch-free mission and continues the growth of digital payments for all partners in the ecosystem. The essential nature of pharmacies makes CVS Pharmacy the perfect initial partner for PayPal and Venmo QR Codes – and we’re proud to help their customers stay safe while purchasing what they need.”
This week’s deal also marks a multi-year agreement between PayPal and InComm. The partnership enables InComm to distribute PayPal QR Code technology to its network of retailers, allowing them to integrate the QR code payment technology into their POS terminals.
PayPal has been touting its touch-free payment technology amidst the COVID-19 pandemic (see below). And given the payment giant’s previous traction and existing user base, the company will certainly come out on top as a winner in the post-pandemic economy.
Elsewhere across the globe, QR code payments have already seen success. Ant Group’s Alipay uses QR codes for in-store payments and had over a 50% adoption rate at the end of 2018.
Micro-businesses, such as sole proprietors and gig workers, are an underserved group when it comes to financial management tools.
Seeing this need, and recognizing that more than 75% of small businesses in the U.S. are sole proprietors, Braintree-owned Venmo is releasing a new set of tools to help them connect, market, and grow their business.
“Venmo was designed to be a place where friends and family can send, split and share purchases and experiences. Today, we are introducing a very limited pilot to extend that experience to allow sellers to access the benefits of Venmo’s platform through Business Profiles,” the company announced in a blog post.
Currently in a pilot phase, Business Profiles allow consumers to create a business profile (separate from their personal profile) on Venmo in order to accept payment for goods and services. Business users can also tap into Venmo’s community of 52+ million users to generate interest, referrals, and awareness of their brand.
At launch, Venmo will not charge businesses transaction fees. This is likely because the company recognizes that the micro-businesses it is targeting already use its P2P money transfer service to accept payments for their business. Venmo cautioned that it will eventually charge a per-transaction fee of 1.9% + $0.10, but did not mention when it will begin charging the fees.
Venmo’s Business Profiles launch today to a limited number of iOS users on an invite-only basis and will be available for Android users “in the coming weeks. The company plans to make the new service more widely available “in the coming months.”
Two of the biggest themes in fintech – digital identity and the rise of fintech in Central and Eastern Europe – meet in the latest announcement from biometric authentication specialist and Finovate Best of Show winner iProov. The company’s facial recognition technology now makes it easier for users of SK ID Solutions’ Smart-ID Service in countries like Estonia, Latvia, and Lithuania to renew their accounts without having to visit a physical bank branch.
“This is a major development for all digital identity providers,” iProov CEO Andrew Bud said. “Estonia has proved, for the first time, that a remote, automated, biometric ID verification service can deliver the highest possible levels of security.”
Recognized as equal to a handwritten signature throughout Europe, Smart-IDs enable users to authenticate themselves and provide permissions online using a smartphone app. iProov’s facial recognition technology adds a three-second scan to compare the image of the user to the image on their presented ID document to help defend against fraud and identity theft.
Smart-ID also leverages NFC-based ReadID document verification technology from InnoValor.
Financial crime risk management innovator Featurespace will be helping Enfuce combat fraud and money laundering courtesy of a newly announced partnership. Enfuce, a financial services firm based in Finland, will use Featurespace’s ARIC Risk Hub to enhance its ability to protect its customers from fraud and financial crime.
“Our clients deserve industry-leading services that allow them to freely and fully concentrate on the success of their core business, without worrying about ever-evolving fraud,” Enfuce co-founder and chair Monika Liikamaa said.
ARIC Risk Hub offers real-time transaction monitoring for fraud and financial crime, enabling institutions to identify and act against anomalous and potentially dangerous behavior as it occurs. The technology also reduces the number of false positives by as much as 70%, keeping anti-fraud processes efficient. Featurespace introduced its fraud-fighting technology to Finovate audiences at FinovateEurope 2016.
Here is a round up of recent news from our Finovate alumni.
Sezzleunveils new logo along with its first annual report.
Flybitsexpands its executive team in New York, Toronto, the U.K., and Dubai.
Yseop and Automation Anywhere join forces to scale intelligent automation.
Lighter Capitalappoints Kevin Fink at CTO and Patricia Elliott as CSO.
InCommlaunches Roblox gift cards in France and Germany.
Finovate Alum Features and Profiles
Revolut’s $500 Million Round Boosts Valuation to $5.5 Billion – Global financial platform Revolut has secured its place as the U.K.’s most valuable fintech.
Dealing with Deepfakes in Fintech – The fintech industry is ripe with security firms, such as iProov, that use AI to combat both video and audio deepfakes with anti-spoofing technologies.
Envestnet | Yodlee Acquires Indian Data Aggregator FinBit.io – Envestnet | Yodlee has acquired another asset in its strategy to further grow and develop its data aggregation and analytics business.
Meet Sonect: Cash Network Builder, Finovate Newcomer, Best of Show Winner – What’s better than having a large pizza with all your favorite toppings delivered to your front door? How about a side order of cash, saving you a trip to the ATM or bank branch?
Azimo Taps Ripple for Cross-Border Payments to the Philippines – Fueling these payment transfers is Ripple’s On-Demand Liquidity (ODL) solution that uses XRP to source liquidity and complete money transfers within three seconds.
Lendio Lands $55 Million to Match Small Businesses with Lenders – The investment more than doubles the company’s previous funding, bringing its total to $108.5 million.
SheerID Expands Identity Marketing Platform – The move enables brands to identify and acquire new customers across the globe.
Updated 1/14/2020: The first big fintech acquisition of the year just crossed the headlines: Visa has agreed to acquire innovative fintech Plaid for a reported $5.3 billion in “total purchase consideration.”
“Today marks an important milestone for our company and for fintech,” company co-founder and CEO Zach Perret wrote on the Plaid blog earlier today. “What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products.”
Plaid’s technology connects digital consumers with thousands of apps and services ranging from Transferwise and Betterment to Chime, Acorns, and popular payment app, Venmo. The company estimates that one in four individuals with a U.S. bank account have used Plaid to connect with thousands of developers across 11,000+ financial institutions.
Visa said the acquisition will bolster the company’s capacity to serve and reputation with fintech developers – especially when it comes to providing them with enhanced payment functionality and related value-added services. Visa also believes the acquisition will help open new business opportunities both in the U.S. and around the world.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” Visa CEO and chairman Al Kelly said. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions, and consumers.”
Visa participated in Plaid’s Series C round in 2018, which was led by Index Ventures and Kleiner Perkins. The company raised $250 million in that funding raising effort. Plaid began the year with an acquisition of its own, purchasing account aggregation and data analytics technology provider Quovo in January of 2019. The value of that deal was not disclosed; Bloomberg reported that the sticker price for Quovo could have been as high as $200 million. Quovo, incidentally, is also a FinDEVr alum, participating in our New York developers conference in 2017.
Plaid demonstrated its technology at FinDEVrSiliconValley in 2014, demonstrating how its API for Financial Infrastructure enabled developers to leverage data quickly, efficiently, and securely power fintech applications. Headquartered in San Francisco, California and founded in 2012, Plaid had raised $310 million in funding previous to today’s announcement.
The ripples from the acquisition news are reverberating throughout the fintech community. And while some are worried about the ability of the innovative startup from San Francisco continue to drive change in the industry, others are busy heralding the news as a victory for fintech and incumbent financial services firms, alike.
Indeed, the acquisition of Plaid by Visa has put other fintechs involved in financial data on notice that they too may hear an inquiring knock on their proverbial doors. One observer on Twitter asked “Will $MA pick up Finicity now?” As of this writing, neither company has deigned to comment.
Quadientunveils new archived document and data retrieval solution.
Euromoney featuresBioCatch in its look at the fintech scene in Israel.
SuperMoneytops $2 billion in loan requests via its online lending marketplace platform.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
New partnership makesVenmo a payment option for Uber and Uber Eats.
Hedgeableannounces plan to end management of accounts by mid-August.
IdentityMind Global to provide KYC for Ontology Trust Ecosystem.
Socurenamed to Red Herring Top 100 in North America for 2018.
Mortgage Cadenceintegrates compliance auditing and monitoring into its loan origination platform.
Bluefin and Verifoneteam up to boost payment security with PCI-validated Point-to-Point Encryption (P2PE).
Twisto payment platform goes live in Poland this week.
Veridiumannounces support for blockchain-based identity platform, Sovrin Network.
This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.
