Dive Brief:
- Venmo, the PayPal-owned payments app, has added an instant bank transfer option to its platform. For a fee, the new feature allows users to transfer funds immediately to their linked bank accounts, an alternative to the standard one to three business days the platform now offers.
- Users will be able to transfer funds to their bank accounts within minutes for a 1% fee, with a minimum fee of 25 cents and a maximum fee of $10.
- In a blog post, Venmo Product Manager Ny Vo said the new transfer option began rolling out Monday and will be widely available in the coming weeks.
Dive Insight:
This isn't the first time the digital payments company has incorporated an instant transfer feature on its platform. The company last year launched its instant transfer via debit card, which allowed users to transfer the money in their Venmo accounts to a Visa or Mastercard debit card.
Venmo first launched the service with a flat $0.25 fee before raising it to 1% of the transferred amount. The company has since brought its debit card transfer service fee back down to a minimum of $0.25 and a maximum fee of $10.
Venmo's new feature comes amid competition from bank-owned money transfer platform Zelle, which also provides instant transfers.
According to TechCrunch, Zelle reported $44 billion sent on 171 million transactions in Q2 this year, making it the largest peer-to-peer payment app in the U.S. Meanwhile, Venmo's payment volume during the same quarter was $24 billion.
Venmo is also considering launching its own credit card to boost revenue and consumer engagement.
The company has been meeting with banks since last year to discuss issuing a Venmo-branded credit card, sources told The Wall Street Journal in April.
Venmo is close to selecting consumer financial services company Synchrony Financial as its credit-card issuer and hopes to announce the card this year, a source told the Journal.
