eBay Turns to Venmo After Ditching AmEx

eBay is adding a new payment method, Venmo, following the termination of its deal with American Express last week.

The e-commerce giant hopes the move will make it easier for Gen Z and millennials to make purchases on its site.

Over 50 percent of all Venmo users are between the ages of 25 and 34. Since its launch in 2009, Venmo has experienced rapid growth in customer usage, particularly in the last decade.

The pandemic contributed to the company’s growth, gaining 18 million new users between 2020 and 2021.

“Known for its popularity among Gen Z and millennials, buyers can enjoy the simplicity of paying for purchases with their Venmo balance, or their bank account, debit card, or credit card linked to their Venmo account,” an eBay spokesperson told Newsweek.

For people selling their products on eBay, nothing changes. According to the eBay News Team, the Venmo option will be added automatically during checkout. The company hopes that the convenience will “reduce abandoned carts and drive sales.”

Venmo is the second most-used online payment method in the U.S., after PayPal, with nearly 90 million users in 2023, according to Priori Data. Venmo is a subsidiary of PayPal with the latter having acquired it in 2013.

Over 2 million companies accept Venmo as a payment method, including Hulu and Uber Eats. Some merchants, however, have decided to drop Venmo as a payment method. In December 2023, Amazon announced it would no longer accept payments directly from the Venmo app. Neither PayPal nor Amazon stated the reasons behind the termination of the cooperation. Amazon still accepts Venmo debit and credit cards.

Concerns around Venmo as a form of payment also include safety. While Venmo has, according to the antivirus software firm AVG, bank-grade encryption safeguarding and two-factor authentication, there are still loopholes that can make accounts vulnerable to scams. Newsweek has reached out to Venmo via email for comment.

Last month, the U.S. government sparked a debate on whether to treat Apple, Google, and PayPal-owned Venmo more like banks and subject them to the same level of federal oversight. The Consumer Financial Protection Bureau announced its proposal after numerous complaints from customers about their struggles to resolve fraud and scams when using their smartphones. The companies involved, however, oppose the idea, stating there is no proof of harm from their products.

Forbes reported that more than half of Americans use digital wallets more than traditional payment methods. Their survey also showed that Venmo and Cash App compete among peer-to-peer apps, with 49 percent and 51 percent, respectively. Nearly half of the people using digital wallets also said the main reason for their switch from traditional bank cards is the convenience, rewards, and loyalty programs. Despite eBay’s prediction, only 4 percent of surveyed users prefer digital payment owing to the speed of checkout.