Payment app Venmo will discontinue its little-used website product to cut costs as part of a revamp that will double down on its mobile app to compete with Zelle — a payment platform forecast to surpass Venmo in user count sooner than later.
Venmo was over-Zelle-ous to appeal to consumers
As the first widely available way to pay your roommate for drunk food, Venmo became a household name. The business chose, somewhat perplexingly, to prioritize the app’s ‘social’ features — like its running feed of friends’ transactions and heavy emoji use.
But despite this emphasis on consumers, Venmo has steadily lost ground to Zelle, who has taken the complete opposite approach with their product, forging relationships with banks first instead of consumers.
But banks are bigger business than buddies
Launched just 20 months ago by a group of 30 banks, Zelle began adding more than 100k consumers a day by auto-enrolling customers at partner banks.
This growth put Zelle on track to grow 78% this year — enough to hit a projected 27.4m US users by the end of the year compared to Venmo’s 22.9m. Even worse for Venmo, it was already behind in the financial front — in 2017, Zelle processed $75B compared to Venmo’s $30B.
At this point, if the company wants to stick around, Venmo better hope that people are really curious who their exes are paying for pizza.