In the establishment of the connected economy, there’s room for cryptocurrencies, for digital wallets and for consumers to use cards in the mix to transact.
As it stands now, payment apps — Venmo among them — are a bit of an on-ramp to cryptocurrencies, where consumers use fiat to buy bitcoin or one of its crypto brethren, hold the crypto and then sell it, converting it back into fiat, which is then used in mainstream commerce.
Other apps also give an entry point to crypto – Robinhood springs to mind. And in the jockeying for top of mind and top of digital wallet, the investment/trading apps may joust with the payment apps for first-time (and more regular) use.
PayPal’s results on Monday night (Nov. 8) show that the new PayPal app has been ramped to global coverage. As CEO Dan Schulman said, the app has driven a 15% lift in consumers transacting with crypto. Year over year, Venmo volume surged 36% to $60 billion, the company said in supplemental materials that were released alongside its earnings. It also said that Venmo is on track to see a $240 billion run rate in total payment volumes – the same as PayPal’s entire U.S. franchise in 2016.
Schulman offered more granular detail on cryptocurrencies during PayPal’s analysts’ call on Monday. “Our strongest week ever for first-time users was last week,” he noted. “And we’ve had strong weeks for first-time user growth on that. But clearly, the new app is driving both discoverability and conversion on the crypto side.”
Though PayPal didn’t disclose other, specific crypto-related details, the company is carving out a place where crypto fits within the ecosystem it is tying together. Venmo’s cash-back-to-crypto feature, for instance, uses the cash back earned on everyday spend to automatically buy crypto, tying it with wallets and commerce at large.
PYMNTS’ own research, done in collaboration with BitPay, shows that as much as 18% of the adult population — some 46 million consumers — are likely to use cryptocurrency to make a purchase
See also: PYMNTS BitPay Study: How Consumers Want to Use Crypto to Shop and Pay in 2021 and After
As Schulman said on the call, “It’s quite clear that consumers and merchants prefer a more connected digital lifestyle that encompasses financial services, shopping, payments and commerce. Our market research and that of others strongly supports the vision of a more connected economy.”
There’s a convergence happening, too, where a range of different activities come within the “umbrella” of the super app. Beyond PayPal, there’s Robinhood. Though privacy concerns are at the forefront after the company revealed a breach that compromised the email addresses and data of millions of users, most of the visible focus has been on trading and investing across Robinhood’s app and online platform.
Read Also: Hackers Steal Millions of Robinhood Customer Emails, Data
But like PayPal, Robinhood has been branching more deeply into cryptocurrencies. Robinhood said that there is a waitlist — one million individuals strong — for its cryptocurrency wallet. The wallet will allow clients to combine their digital coins into a single account, letting them trade, send and receive cryptocurrencies to and from other wallet addresses, Robinhood has said.
Related news: Robinhood CEO Says Over a Million Users Want to Try Its Crypto Wallet
But the lines are blurring. Robinhood has a debit card and other cash management tools in place, indicating a continuum between investing, trading and then using those activities (and cash available in the accounts) to fund everyday transactions. At present, crypto trading represents a significant portion of Robinhood’s top line — $51 million, or 19% of the $267 million reported in transaction revenues.
It’s likely the case that PayPal users, quite comfortable with eCommerce, are also familiar with Robinhood. PayPal may have a leg up for now, given some users’ privacy concerns following the Robinhood breach. But where customers ultimately choose to go (to perhaps use debit cards or buy and hold crypto) may spur a hotbed of competition. At the end of the most recent quarter, Robinhood had 22.4 million net cumulative funded accounts, while PayPal’s latest data show 416 million.
Scale matters, of course, in the crafting of an ecosystem — especially one that wants to get users to embrace more activities and cement their loyalty.
The Justice Department reportedly told financial regulators that it didn’t have sufficient evidence to block the proposed merger between Capital One and Discover.
This decision would allow the two banking regulators that must approve the deal — the Federal Reserve and the Office of the Comptroller of the Currency — to approve the transaction, Bloomberg reported Thursday (April 3).
The Justice Department told the regulators of its decision in a confidential memo, the report said, citing unnamed sources.
The Justice Department did not immediately reply to PYMNTS’ request for comment.
Staff at the Justice Department were divided about whether the merger should be challenged, and the new antitrust division chief, Gail Slater, made the decision that there was not enough evidence to do so, according to the report.
Earlier, under the Biden administration, antitrust officials at the Justice Department had said they had some concerns that the deal could harm competition, per the report.
Under the Biden administration, the Justice Department looked at not only the competitive factors of the deal, which is what it normally focuses on in bank mergers, but also how the deal might affect different customer segments, fees, interest rates, bank locations, product variety, network effects, interoperability and customer service, the report said.
Capital One announced its planned acquisition of Discover in February 2024, saying the deal would create a global payments platform with 70 million merchant acceptance points in more than 200 countries and territories.
“Our acquisition of Discover is a singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies,” Richard Fairbank, founder, chairman and CEO of Capital One, said at the time in a press release.
The deal took a step toward completion in December when it received approval from the Office of the Delaware State Bank Commissioner.
It took another step forward in February, when the two companies said that more than 99% of their shareholders had voted to approve the merger. When announcing the votes, Capital One said it expected the transaction to close early this year, subject to approval by the Federal Reserve and the Office of the Comptroller of the Currency.
