The digital payments pioneer is scouting for new ways to increase customer use of its digital wallet, including plans to add a new Venmo teen account.
PayPal is counting on its digital app to boost business as it focuses more on customer engagement and less on adding new customer accounts.
To that end, one new service the company is testing is a teen account for users of its Venmo peer-to-peer payment tool, PayPal Senior Vice President Doug Bland said in a bank conference presentation earlier this month. He didn’t say anything about the timing of that new Venmo feature, only that the testing will continue into next year.
PayPal is also working with Apple to create a tap-to-pay function with iPhones in its digital wallet. In addition, a new PayPal rewards program offering users cash back is another way the San Jose-based company is trying to enhance its wallet offering.
The digital payments pioneer earlier this year scrapped previously set customer account goals after falling short of them last year and embarked on a campaign to draw its existing customers deeper into PayPal’s portfolio of services. Specifically, the company is focused on drawing customers to a new digital wallet launched last year.
When PayPal is able to convert customers to using its mobile app they provide 50% more revenue to the company, on average per user, because app users have 60% more transactions than non-app users, Bland said at the Citi Financial Technology conference.
“It’s all about how do we continuously drive this habituation, and this engagement, of getting people to open the app on an everyday basis,” Bland said at that conference on Nov. 15.
While PayPal has been able to increase the overall funds in customers’ wallets in recent years, the amount in each account has remained relatively low.
PayPal is constantly reviewing how it can change the user screen, the flow of a customer transaction and other aspects of how users experience the app as part of testing, experimentation and improvements, said Bland, who heads the consumer side of the company’s business.
PayPal expects that better engagement with its customers will mean lower churn, Bland said. That should also mean more users, he said.
Churn was part of the problem for the company when PayPal executives acknowledged in February that the company would miss its goals for revenue and net new user account acquisition. The company cut its expectations for revenue growth this year at that time, saying the year was off to a slow start and the macroeconomic outlook was cause for a more cautious view. Then, it cut them again in April.
Executives also disclosed in February that PayPal wouldn’t achieve its prior goal of reaching 750 million active users by 2025, noting it ended last year with 426 million.
Meanwhile, PayPal has let some initiatives fall away this year, including its prior interest in building up its use of QR codes, Bland said. It’s focusing less on some of those initiatives as it drives more resources into the wallet, he said.
Source: paymentsdive.com