PayPal (PYPL) shares are under pressure after Amazon (AMZN) announced it would stop accepting Venmo payments. The popular PayPal-owned payment app’s website says: “Venmo will remain available until 1/10/24 for users who currently have it activated in their Amazon wallet.” Yahoo Finance’s Josh Lipton and Julie Hyman explain the details of this Trend tickers.
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JOSH LIPTON: PayPal is under pressure Amazon is sending a letter to its users saying they will no longer be able to use Venmo for payments starting early next year. So the headline here seems to be: “OK, you know, Paypal, the news is that Amazon is telling its core users, it sounds like Pay with Venmo, Julie, is no longer available for checkout on their site will be. Comes into effect, it sounds like, on January 10th.
Users will apparently still be able to use Venmo debit and credit cards. But that’s why they originally launched this partnership last year, actually around this time in October last year. Evercore said Paypal hoped to effectively monetize Venmo. Amazon was clearly looking to gain exposure among newer, younger customers. The bottom line is that they believe this news is simply the result of a lack of adoption as consumers simply fail to make Venmo payment their preferred payment method.
JULIE HYMAN: I mean, it’s just a different thing when it comes to Paypal. In stark contrast to the two tech giants we just talked about, this stock is down more than 20% year-to-date. And it’s going through a big transition right now from long-time CEO Dan Schulman to Alex Crist, who will be the new CEO. You’ve talked about reorganizing some new business units to sharpen the company’s focus.
And with that in mind, it feels kind of incremental. As mentioned, we will have a more comprehensive look at the payments landscape with an analyst tomorrow. But it’s an interesting time in this universe, especially for Paypal.
JOSH LIPTON: Yes. This note from Evercore is, I think, a really interesting point that they brought up. With PayPal, as you said, they discussed a number of Venmo partnerships, right? You talked about Uber and Grubhub. They wanted to alert their customers that, in their opinion, this new way raises concerns about Paypal’s ability to make money on these platforms. So to your point, no news you needed.
JULIE HYMAN: No, definitely not.