By Anna Irrera
NEW YORK (Reuters) – PayPal Holdings Inc <PYPL.O> said more than two million U.S. retailers will be able to accept payments through its mobile app Venmo starting this week, seeking to broaden its reach with a brand that has been a hit with young people.
Venmo, which has been part of PayPal since 2013, is one of the most popular mobile applications to make person-to-person payments in the United States. It processed $8 billion (£6 billion) in payments in the second quarter of this year.
Venmo users will be able to use their app balance or linked cards and bank account to shop on the mobile sites of almost all merchants that accept payments with PayPal, including retailers such as Foot Locker, Lululemon Athletica Inc <LULU.O> and Forever 21.
Paypal started slowly introducing the ability to pay select businesses with Venmo early last year.
“At Venmo from the very early days our vision was to always let you use it for whatever you want to buy,” Ben Mills, head of product, at Venmo, said in an interview.
The company will be charging merchants fees for processing Venmo payments, Mills said, adding that the service’s ease of use could help increase their sales, he added.
Over the coming months Venmo users will also be able to transfer money instantly from Venmo to their bank accounts for a $0.25 fee per transfer.
At the moment Venmo immediately alerts users that a money transfer is in progress, but takes time to shift funds between bank accounts.
San Jose, California-based PayPal has been expanding its services to gain advantage over rivals in the digital payments market, particularly in P2P payments, where competition has intensified.
This year a consortium of some of the largest banks in the United States launched Zelle, a network that allows their customers to send money to each other instantly on their smartphones.
PayPal also said that retail purchases using Venmo will be covered by its purchase protection scheme, where customers may get refunds if they do not receive a product or it is different than described.
(Reporting by Anna Irrera; Editing by Edwina Gibbs)