Venmo adds Instant Transfer link to bank accounts
As the competition mounts to increase adoption rates for person-to-person payment apps, PayPal's Venmo is adding a way for users to quickly move money from the app to their bank account.
The service will be available to Venmo users in the coming weeks, PayPal product manager Ny Vo stated in a blog.
The expanded Instant Transfer adds money movement to linked bank accounts more than a year and a half after Venmo launched Instant Transfers to eligible Visa and Mastercard debit cards for a fee of 25 cents to a maximum of $10, depending on 1% of the transferred amount. Venmo's Instant Transfer to bank accounts will operate under the same fee structure.
The Venmo transfer expansion also follows the lead of PayPal four months ago when it launched an Instant Transfer to linked bank accounts for PayPal account holders.
The Venmo transfer to a bank account allows users who have received a payment to swiftly place money in their account, or for a business or gig economy worker to move money to pay bills. The Venmo transfers will usually occur within minutes, instead of one to three business days, PayPal said.
PayPal did note that, depending on the bank holding the account and its capabilities for accepting real-time transfers, a Venmo transfer could take up to 30 minutes to complete.
The added service also makes sense because PayPal executives last month reported during quarterly earnings that Venmo users were spending more time engaged on the app, participating in other features and moving on to other PayPal services as well. PayPal views the time spent on Venmo apps as a way potentially to generate more revenue growth for the P2P service. Fees collected for Instant Transfers would add to that potential.
PayPal earlier this year for the first time revealed its number of Venmo users, saying the service had 40 million active users. While Venmo competes with the bank-operated Zelle P2P app, an apples-to-apples comparison of the two has not been established.
At the time of Venmo's user base report, Zelle was revealing only that customers from nearly 5,400 banks were using it, while the banks had handled 47 million Zelle transactions totaling $39 billion during the first quarter of 2019.
By comparison, Venmo's 40 million active users moved $21 billion of total payment volume in the first quarter, a 73% jump year over year, PayPal said.