- Amazon will no longer allow users to pay with Venmo beginning Jan. 10, according to a notice sent to users.
- The company announced last October it would accept Venmo at checkout.
- Shares of PayPal, which owns Venmo, slid on Thursday.
Retail giant, Amazon.com Inc., has decided to cease the use of PayPal Holdings Inc.’s Venmo payment service for purchases on its platform, just over a year after introducing the option.
Venmo can no longer be added as a payment method in Amazon wallets, and customers who already have it enabled will not be able to use it after January 10, according to a notice from Venmo.
venmo and amazon broke up pic.twitter.com/d0NF7snIvZ
— sami🦋✨ (@queeerjoy) December 7, 2023
The notice mentioned “recent changes” without providing further details. Amazon customers will still be able to use Venmo debit and credit cards. It reads,
“Due to recent changes, Venmo can no longer be added as a payment method,” Venmo’s notice on its website reads. “Venmo will remain available to users who currently have it enabled in their Amazon wallet until 01/10/24. ”
PayPal and Amazon launched their partnership in October 2022, with PayPal aiming to monetize Venmo more effectively and Amazon seeking exposure to a younger customer base, according to Evercore Inc. analysts led by David Togut.
They believe the discontinuation is likely due to a lack of adoption, as consumers did not choose Pay with Venmo as their preferred checkout method.
PayPal, based in San Jose, California, has experienced a slowdown on some of its platforms as consumers return to in-store shopping and reduce spending due to inflation.
The company is restructuring its senior management under new CEO Alex Chriss and creating three new business units focused on consumers, small businesses, and large enterprises.
An Amazon spokesperson confirmed the change and said shoppers will still be able to use “nearly a dozen other payment methods.” The company didn’t elaborate on why it is removing Venmo as a payment method.
A Venmo spokesperson said in a statement that the company and Amazon agreed to disable the payment service as an option, adding: “We have a strong relationship with Amazon and look forward to continuing to build on it.“
PayPal shares dropped due to the announcement from 1.8% to $58.46 at 1:15 p.m. in New York, making it one of the day’s five worst performers in the S&P 500 Financials Index. The shares have declined 18% this year, compared to a 4.3% increase for the S&P 500 Financials Index.