By the numbers: PayPal reported a stellar Q3 propelled by Venmo, which processed approximately $60 billion in total payments volume (TPV)—a 36% YoY surge. Venmo is on track to bring in a record $900 million in revenues this year and has more than 80 million users, per its earnings release.

With its earnings, the payments giant also announced a partnership with Amazon to add Venmo as a checkout option on Amazon.com and the etailer’s mobile app starting in 2022.

How we got here: Venmo introduced a slew of updates last quarter that likely contributed to its growth.

• It launched a redesigned app in July with a more user-friendly layout that highlights features like the Venmo Card and crypto trading. The revamp also tackled privacy concerns by introducing new customer controls to help build trust among users.
• In August, Venmo continued its crypto push with Cash Back to Crypto, a feature that lets Venmo credit cardholders automatically purchase cryptos with their monthly cash-back earnings. As demand for crypto-linked cards builds, this feature can attract new users to the card.

What’s next: The Venmo-Amazon tie-up is the first of its kind for the companies—Amazon doesn’t integrate with PayPal.

• PayPal’s CEO Dan Schulman said the partnership is “just at the start of Venmo’s commerce journey.” Given Amazon’s massive scale—its US retail ecommerce sales are projected to hit $376.57 billion this year, per our forecasts—the partnership is a huge opportunity for Venmo to expand the use of its checkout functionality and grow its payments volume.
• And the tie-up may help Amazon tap into crypto. Amazon is exploring crypto payments but denied rumors that it will accept them this year. If Venmo integrates PayPal’s Checkout with Crypto functionality, Amazon could use it to meet rising consumer demand for the payment method without launching a crypto service in-house.

Why this matters: PayPal is increasing Venmo’s monetization to reach profitability in 2022, and Pay with Venmo will be a key revenue driver for the app moving forward. The Amazon partnership brings Venmo much closer to its goal, expanding its addressable market to rake in more revenues.

Related content: To read more about the tie-up between Venmo and Amazon and what this could portend for the rest of the ecommerce world, check out what our eMarketer analysts have to say.