Uber is set to roll out support for the PayPal-owned mobile payment service Venmo over the next few weeks as an additional payment option for customers in the United States. The new capability will be called "Pay with Venmo" and is part of Uber's broader tie-up with PayPal. It remains unclear, however, when and if the new feature will hit other markets.
With the new alliance, Uber customers booking a ride or ordering food via Uber Eats will soon have the option to complete their transaction with the funds in their Venmo account. Uber already allows customers to pay using the bank account, credit card or debit card linked to their Uber account, and the addition of Venmo to the mix expands those options. Given Uber's popularity as a ride-sharing app used by approximately 40 million monthly active riders, Venmo's addition to the transportation service will likely compete with the major digital payment solutions available to U.S. customers such as Zelle, which was jointly developed by several major banks in the United States in June last year to provide a faster and less complicated service compared to the more traditional online money transfer services. It makes sense for Zelle to process financial transactions much faster since it is backed by some of the largest financial institutions in the country including Bank of America, Citibank, JPMorgan Chase, and Wells Fargo.
Venmo already gained a big boost in October last year when it was released to more than two million retailers in the United States. PayPal operates Venmo since 2013 and the peer-to-peer mobile payments app has been widely popular among the younger demographics. PayPal started to add the option to pay with Venmo last year. Most recently, Venmo launched a debit card for real-world payments to allow users to load up their Venmo balance and use it anywhere, whether at a restaurant or at a department store. Venmo's debit card is a Mastercard debit card with a chip, so payments should be more secure. The Uber support is expected to significantly boost Venmo's reach and popularity as it will soon be accepted everywhere that Uber and Uber Eats are available.