Venmo, the popular payments app, is finally reaching beyond peer-to-peer payments. On Wednesday afternoon, the service introduced a feature that will allow people to use their Venmo accounts to make payments inside third-party apps. In doing so, the Paypal-owned company is shifting to a service that facilitates retail purchases in a move that pits it against Apple Pay and Android Pay.
At launch these new merchant payments will be limited to two apps: Munchery, an on-demand food startup, and Gametime, a sports ticket vendor. Venmo, according to a statement from general manager Michael Vaughan, intends to support additional apps in the future. Merchant payments will be limited to Venmo's iOS app at launch, but the company says an Android build is on the way.
For Venmo users, merchant payments will streamline purchases previously made with credit cards. Payment information is stored securely in Venmo. The app's sharing option, which pulls all money transfers made on it into an activity feed, will become a second, optional step when making payments in a third party app.
According to a report in Quartz, Venmo plans to extend the new feature to all PayPal merchants. The company will presumably charge a service fee for every payment capitalizing on the additional dollars flowing through it as it supports more merchants. Venmo processed $2.5 billion in payments in its fourth quarter -- up 174% from the year prior.
If you have a Venmo account, you'll get an email when the feature is available.