Inc. shoppers will be able to pay with peer-to-peer mobile payment service Venmo at checkout on Black Friday. Inc. now allows some shoppers to use Venmo to pay at checkout. And starting on Black Friday, all Amazon shoppers will be able to use the option at checkout, “in time for peak holiday shopping,” said Venmo owner PayPal Holdings Inc. CEO Daniel Schulman during an earnings call on Nov. 3. 

Schulman said Amazon adding Venmo is “a reflection of Venmo scale and ubiquity, particularly in younger demographics. And we look forward to working closely with Amazon on this new offering to drive results.”

Venmo LLC launched in 2009, and PayPal Holdings Inc. acquired it in 2013. Venmo users link their bank accounts to the app, allowing them to pay other people with Venmo accounts. That money then stays in Venmo for later use or can be transferred back to the person’s checking account.

Online retailers pay Venmo $0.49 and 3.49% per transaction. That is higher than the average cost of credit card purchase, which is about 2.5% when including all the fees an e-retailer pays, says senior analyst at and Ted Rossman.

Shoppers can add their Venmo account as a form of payment on Amazon and select it during checkout. Venmo boasts nearly 90 million active accounts including 57 million monthly active accounts. 


Currently, Amazon offers allows shoppers to pay using credit and debit cards, store cards, health savings accounts (HSA), flexible spending accounts (FSA), and electronic benefits transfer (EBT) accounts. The mass merchant added buy now, pay later option Affirm in late 2021. 

Only 5.2% of Digital Commerce 360’s Top 1000 offer Venmo at checkout. The top forms of payments for Top 1000 retailers include Mastercard Inc., Visa Inc., American Express Co., Discover Bank and PayPal.

45.7% of Digital Commerce 360’s Top 1000 online retailers — North America’s leading retailers by web sales — offered a BNPL option in 2021, up from 28.2% in 2020. And 7.4% offered two or more BNPL options, an increase from only 1% in 2020.


Small- to mid-sized retailers are also offering BNPL, with 32.9% of Digital Commerce 360’s Next 1000 offering at least one BNPL option. The Next 1000 lists retailers ranked Nos. 1,001 to 2,000 by online sales.

Amazon offers more payment options to appeal to more shoppers

Amazon is following the conventional wisdom that you should offer as many different opportunities for consumers to actually complete the purchase as possible, says Gregory Ng, CEO of consulting firm Brooks Bell.

Only half (50%) of consumers rated Amazon’s checkout/payment process as “outstanding,” according to a Brooks Bell survey of 1,000 U.S. consumers in October 2021. But, only 9% said Amazon’s checkout/payment process needs to improve. 


“The majority of humans are becoming very, very comfortable with a phone [app] being the means of their transactions,” Ng says. “And Venmo is the de facto standard — it’s a verb. So that’s a huge advantage for brands like Venmo, but the idea remains the same. People want to make purchases the way in which is convenient for them. And really savvy retailers know that.”

Payment trends and Amazon

Vijay Sondhi, CEO of payments processing vendor NMI, says he plans to “wait-and-see” how significant the addition of Venmo to Amazon’s checkout will be.

Instead, he’s keeping an eye on whether Amazon will allow Apple Pay or Google Pay at checkout in the future. 

Amazon wants to avoid giving any sort of commission to Apple to allow customers to pay using Apple Pay or Google Pay for Amazon purchases, he says.


“Amazon doesn’t want to pay Apple the 30% commission rate,” Sondhi says. “That’s the power of Apple and Android. They’re the gating function of the aggregation of those payment methods.” 

And Sondhi doesn’t expect Amazon to offer Apple or Google Pay any time soon.

“They’re at war for digital goods,” he says. “Amazon is upset that they can’t sell something on an iOS device without paying the toll gate.”

The risks of paying with Venmo

Consumers are at risk when paying with Venmo because they link their bank account to the app to withdraw and deposit funds, Sondhi says. Should a consumer want to reverse a transaction, it is difficult to do so. Credit cards allow consumers to report a lost or stolen card. Consumers are protected against fraudulent transactions and are not held liable for those fraudulent transactions. But a credit card requires a credit check and approval. The Venmo app requires that the consumer link a debit card or checking account. No credit check required.


After learning about Amazon offering Venmo, Sondhi noted that the mass merchant did not highlight the added risks.

“Amazon isn’t really pointing out that it’s way riskier to pay with Venmo when your funding source is a debit card or checking account,” Sondhi says.

Shoppers’ Venmo transactions are protected by Amazon’s own back-end technology. Amazon also noted Amazon’s A-to-z Guarantee, in which customers must contact the third-party seller and allow that seller 48 hours from the first message to find an acceptable resolution. The merchant includes a number of scenarios and actions to take should a dispute occur. Venmo’s own purchase protection can be applied for eligible items and the seller pays a small transaction fee.

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