PayPal (PYPL) shares are under pressure after Amazon (AMZN) announced it would stop accepting Venmo payments. The website for the popular PayPal-owned payment app states that "Venmo will remain available to users who currently have it enabled in their Amazon wallet until 01/10/24." Yahoo Finance's Josh Lipton and Julie Hyman break down the details of this trending ticker.
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JOSH LIPTON: PayPal under pressure Amazon sending a letter to its users that they will no longer be able to use Venmo to make payments starting early next year. So this one, the headline here seems to be, OK, you know, Paypal, the news is Amazon's telling their prime users, it sounds like, Julie, pay with Venmo will no longer be available for checkout on their website. Goes into effect, it sounds like, January 10th.
Users will still, it sounds like, also, they can still use Venmo debit and credit cards. But this was they initially rolled this partnership last year, actually around this time October of last year. Evercore saying Paypal was hoping to monetize Venmo or effectively. Amazon was clearly looking to gain exposure to the newer, younger customers. Better bottom line is they expect this news is simply the result of a lack of traction, as consumers just fail to adopt using pay with Venmo as their preferred checkout.
JULIE HYMAN: I mean it's sort of just another thing when it comes to Paypal. In sharp contrast with the two tech giants we were just talking about, this stock is down year-to-date by more than 20%. And it's undergoing this big transition from longtime CEO Dan Schulman to Alex Crist, who's going to be the new CEO. They've talked about reorganizing some new business units to sort of sharpen the focus of the company.
And so this feels sort of incremental given that backdrop. As we talked about, we're going to get a bigger sort of payments landscape outlook tomorrow with an analyst. But it's an interesting time for Paypal in particular in that universe.
JOSH LIPTON: Yeah. This Evercore note, actually, I thought a really interesting point they made, with Paypal has kind of discussed, they said, a number of Venmo partnerships, right? They've discussed Uber and Grubhub. Their point to their clients was this new sort of creates concern in their opinion around kind of just Paypal's ability to monetize on those platforms. So to your point, not news that you needed.
JULIE HYMAN: No, definitely not.