Venmo offers effortless crypto transfers for customers

Venmo is launching a new crypto transfer feature.

In a press release, PayPal, which owns the payment app Venmo, said users will be able to transfer cryptocurrencies between Venmo wallets. They will also be able to transfer to PayPal accounts and to external wallets and exchanges.

Peer-to-peer crypto transfers are gaining momentum

Venmo first dipped its toes into the crypto market in 2021 when it launched its in-app trading platform. But until now, the app has only supported buying and selling of crypto assets, not transferring them.

The introduction of full crypto wallet functionality to such a popular payment app marks a significant milestone in the journey towards the mainstream adoption of cryptocurrencies.

Both the PayPal and Venmo brands are well known among the general population. By integrating crypto transfers, millions of Venmo users will be able to send assets like Bitcoin to their peers. It also opens up an opportunity for the normalization of crypto payments.

Building on the success of its popular interface, Venmo hopes a simple user experience will help attract people to the new feature. Users will be able to identify a recipient with their wallet address. They will also be able to generate a unique identifying QR code that they can share with others.

Venmo Plays Catchup to Cash App

Venmo’s recent announcement may be a response to the threat of increasing competition in the mobile peer-to-peer (P2P) payments market.

For example, while Venmo remains one of the most popular payment apps in the US, the likes of Cash App have also gained prominence.

In fact, Ark Invest CEO Cathie Wood revealed last year that her company had ditched its PayPal shares in favor of Cash App owner Block.

“We tend to bet on who we think will be the winners,” commented Wood. “As we consolidate our portfolios during a risk-off period, we chose Block over PayPal.”

Unlike Cash App, which entered the crypto payment space in 2018, Venmo was relatively late to the party.

Cash App now leverages the Bitcoin Lightning Network to power P2P BTC payments. This decision has helped Block facilitate faster, cheaper transactions, allowing it to pass efficiency gains on to users.

Transaction fees are central

Thanks to the way the Lightning Network facilitates low-cost, low-value transactions, it has been a major driver of the adoption of commercial Bitcoin payments because it is faster and cheaper than other crypto transfer options. Moreover, it may even be a better choice than fiat payment channels.

Especially for businesses that trade across borders, the Bitcoin Lightning Network helps reduce transaction fees. For supporters of everyday Bitcoin payments, it helps realize the dream of a limitless decentralized payment system.

While Venmo has yet to state how fees and transaction costs will work for crypto transfers, it’s likely to be a significant consideration for potential users given the growing popularity of mobile wallets powered by the Lightning Network.