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Square Isn’t Hurting from Rise of PayPal’s Venmo

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Aug. 1 2019, Updated 7:54 p.m. ET

Cash App user base doubles

Square (SQ) and PayPal (PYPL) compete in multiple areas. One of those is facilitating peer-to-peer payments across mobile devices. Square operates a peer-to-peer payment service called Square Cash while PayPal runs Venmo. Both Square and PayPal have now reported their results for the fourth quarter, which ended in December, and a look at the numbers they have published shows that currently, no one is feeling the pinch from the rise of the other.

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PayPal, which was the first to release its December quarter results, reported that Venmo’s transaction volume soared 80% year-over-year to $19 billion in the quarter. PayPal also revealed that 29% of Venmo’s user base is now monetizable, up from 24% in the September quarter. Square reported that Cash App’s uptake more than doubled to 15 million monthly active users in the December quarter. In addition, Square pointed out that Cash App was among the top-20 apps on Apple’s App Store.

Peer-to-peer payment competition

The other big brands competing with Square and PayPal in the mobile peer-to-peer payment market include Alphabet’s (GOOGL) Google and Facebook (FB). Google operates a peer-to-peer payment service called Google Pay, which it introduced in India as Tez in late 2017. Facebook has built payment capability into its Messenger app and is currently testing payment for its WhatsApp app in India. Big banks such as JPMorgan (JPM) and Bank of America (BAC) are rallying behind a mobile peer-to-peer payment service called Zelle, which facilitated 135 million transactions worth $35 billion in total in the December quarter.

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