The central theses
- Amazon is hiring PayPal-owned Venmo to help its customers pay for their purchases, and PayPal’s shares fell.
- Customers who have Venmo activated in their Amazon wallet can use it until January 10th.
- Amazon and PayPal had agreed to enable the Venmo payment method in October 2022.
Shares of PayPal Holdings (PYPL) fell after Amazon (AMZN) said it would no longer accept PayPal-owned payment service Venmo for purchases.
Venmo said in a statement that “due to recent changes,” users who currently have the service activated in their Amazon wallet will no longer be able to purchase products on the site after January 10. Amazon customers can still use Venmo debit and credit cards.
Amazon and PayPal announced the Venmo agreement in October last year. A PayPal announcement at the time said: “The ability to pay with Venmo on Amazon brings the familiarity and trust you know and love when using Venmo to the Amazon shopping experience.”
Max Bardon, vice president of Amazon Worldwide Payments, added that Amazon made the decision to accept Venmo payments because it wanted to offer its customers more “convenient, easy-to-use and secure payment options.”
PayPal shares closed 1.8% lower at $58.48 on Thursday, down 22% since the beginning of the year. Amazon shares rose 1.6% to $146.88 on Thursday and have gained 71% in 2023.