Could Venmo Become Your Customer's Primary Bank?

Jim Marous (0:00)

Has Venmo become your customer's primary bank? Here's a number that should give you pause. PayPal and Venmo together reported 439 million active accounts last quarter. That's more than Chase, Bank of America and Wells Fargo combined. Most people would glance at that number and worry about market share. The real concern should be how strong trust in Venmo and PayPal has become. Venmo launched in 2009 and PayPal launched in 1998

Both of these are older than Chime and Nubank combined. They spent decades earning that trust through payments and every transaction reinforces it instead of letting it fade. Most challengers that came after your primary banking relationships had to earn that trust by competing for deposits or loans. Chime spent about seven years competing for checking accounts. Nubank built its base city by city across Brazil, Mexico and Colombia for the better part of a decade.

Venmo and Paypal never had to compete for that kind of recognition. They already had it built years before either challenger existed, one payment at a time. But there's a bigger story here, and it's why this one could disrupt banking more than the Fintech brand episodes we've already covered. Paypal CEO Enrique Lores told investors that he wants Venmo to become a one-stop shop for money management, crypto and investing. And he named the model he's chasing, SoFi and Chime.

Neobank brands we've covered in previous episodes. Lores isn't hinting. He's telling you exactly who he wants to become. So ask yourself this question. If a customer already uses Venmo to pay a friend and to check out online, how likely would they be to try more? And wonder why they even needed a separate bank or credit union at all? The build-out behind that ambition is already underway. The Venmo credit card is growing by more than 50% year over year. And here's why PayPal keeps feeding it. Customers who use the debit card alongside Pay with Venmo generate 9 times the revenue per account of those using Venmo for P2P alone. That's the motivation behind every move that follows. Then there's the one that should worry you the most.

Venmo teen accounts for kids 13 to 17 are tied to a parent's Venmo and can receive direct deposit. That's a first paycheck landing in Venmo, not a checking account in your bank or credit union. If you want outside proof, this is real. Look at who tried to buy it. In July, Stripe and the private equity firm Advent offered to buy PayPal for a 28% premium over the stock's trading price. PayPal's board turned it down. According to reporting on the deal, Venmo was the real prize, not Baintree, the part of PayPal that actually competes with Stripe. Venmo drives something like 70% of PayPal's transaction on only about 5% of its revenue. And that gap between how much it's used and how little it's monetized is exactly what a buyer thought it could close. Now, before this starts to sound like Venmo already runs a table, let's be fair about where the real competition still stands. Zelle moves nearly three times as much P2P money as Venmo, with a forecast of close to $933 billion this year versus Venmo's roughly $324 billion. A record 100 million Bank and Credit Union accounts used Zelle in a single month this December. On raw dollars, Zelle wins and it's not even close. But Zelle is a feature inside a banking app. Nobody says they're going to Zelle someone the way they say Venmo me. Zelle wins on volume. Venmo wins on frequency, identity and brand pull. That's the foundation a banking super app is built on, not total dollars. A few more honest numbers. Venmo brought in around $1.7 billion in revenue in 2025, roughly 5% of PayPal's total and a small fraction of what US retail banking generates in a year. PayPal's core checkout business has grown by only 2% for two consecutive quarters. So this is a company still managing a turnaround, not operating from a position of total strength. And that debit card growth I mentioned, more than 50%, is still a small share of PayPal's overall branded volume today by its own admission. A high growth rate on a small base tells you direction, not size. And Venmo's own P2P growth is actually expected to slow in the years ahead, not speed up. Venmo also has to prove it can handle the moments that matter most. A complicated loan decision, a fraud case at 11 p.m., a small business that's outgrown its app that was used for splitting dinner. Being useful for everyday payments doesn't make you useful for broader engagement. And that's the part of the relationship Venmo hasn't earned yet. So here's the real question, and it isn't about marketing budgets at all.