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Venmo inches its way into retail apps, simplifying in-app payment

Mobile and online payments service Venmo is becoming more widespread and finding its way into other applications’ checkout systems.

Apps like LivingSocial, HotelTonight and YPlan are all incorporating Venmo Touch into their checkout systems so that consumers do not have to type in credit card information. Instead, they can link their Venmo account and use one of the cards they had saved to make a purchase.

“It only takes 10 seconds to make a booking on HotelTonight, but we’re always searching for ways to make everything even easier,” said Jared Simon, chief operating officer/cofunder of HotelTonight, San Francisco. “The payment process has always been a significant opportunity area, and Venmo has nailed a fantastic solution.  Integrating it was a no-brainer for us.

“Credit card entry creates friction that reduces conversion, so anything that reduces that friction is a marketing win for us.”

From social to commercial
Venmo started out as a social payment service that let friends pay their friends with a credit or debit card. The layout of Venmo is similar to Facebook’s newsfeed and lets friends “Like” and comment on payments.

Consumers can use Venmo on desktops or via the Venmo mobile app, as well as through SMS.

As the social mobile aspect of Venmo is picking up, however, the company is also branching out beyond enabling the paying of friends and to more commercial uses.

“Venmo is unique in that it allows other apps to take advantage of the large network of Venmo users when they are looking to make payments,” said Ron Shapiro, Android engineer at Venmo, New York. “Through Venmo Touch, apps like LivingSocial can have a more seamless checkout experience if the user has used Venmo before on their phone.

“Even if they haven’t, they have the option to vault their data with Venmo Touch so that future purchases in any other app using the service are quick and easy,” he said.

“By using Venmo, the time to integrate payment processing is diminished tremendously. The process becomes a matter of hours rather than days or weeks.”

For example, consumers within the LivingSocial app can choose to checkout by using their Venmo card. This speeds up the process and saves the consumer from having to type in credit card information.

“As we all know, tapping out your 16-digit credit card on a touchscreen can be difficult,” said Patrick Joyce, director and general manager of mobile at LivingSocial, New York.  “We’re always looking for ways to improve our customer experience. Following the integration to our app, previous Venmo customers can simply select a card on file.”

Braintree, a payments company that enables credit card transactions on a mobile phone, acquired Venmo last year, and eBay just acquired Braintree last week in a significant move for its PayPal strategy (see story).

“With PayPal’s added reach, adoption of the Venmo technology is likely to become more widespread,” said Brian Stein, managing director at Pervasive Path, Cleveland, OH. “As more solutions provide this integration, the value of sharing saved credit cards across applications will increase exponentially. Additionally, as PayPal adds their other payment options and services, such as Bill Me Later, to Venmo, the value proposition will only continue to improve.”

Standing out in a crowd
With mobile commerce offerings increasing by the minute, it is important for Venmo to stand out and find its unique place.

One of the perks of Venmo is that it does not require any specific technology beyond the basic smartphone. There is no NFC technology, and users do not even need to own a QR code reader.

Consumers can simply press a button to checkout with their Venmo credit card. This simplicity and ease is a huge benefit for an mcommerce service.

Additionally, the system works on any mobile device and within any application.

“This type of reach is not common to many of the competing tools,” Mr. Stein said.

“Venmo/Braintree currently do not offer a mechanism for in-person transactions with a swipe credit card reader,” he said. “This may change following the PayPal acquisition, but current retailers looking to use a shared payment platform across e-commerce and POS cannot make use of Venmo.”

Driving mcommerce
Venmo and Braintree are making it easier for consumers to convert on mobile.

One of the biggest complaints consumers have when it comes to purchasing via mobile is that they have to enter in too much info on a small screen, and it gets frustrating.

“Braintree has about 40 million accounts on file on those servers, so what Venmo/Braintree bring to the table is the ability to offer one-click checkout to these  approximately 40m customers,” said Rick Oglesby, a senior analyst with Aite Group, Boston.

“The one-click checkout is particularly important for mobile shoppers since entering address and card info on a small, touchscreen phone is especially tedious,” he said. “Because it’s tedious, consumers won’t do it so merchants that offer one-click checkout have a higher sales conversion rate.”

Final Take
Rebecca Borison is editorial assistant on Mobile Commerce Daily, New York