Uber is the latest frontier in Venmo’s monetization plans

PayPal Holdings Inc. has been talking for almost a year about letting Venmo users pay with the service for items sold by third parties, but the company has become more aggressive with its efforts in recent weeks.

With its latest move, the company is hoping that millennials and others will start paying for Uber rides with the Venmo service. PayPal PYPL, +2.12%  announced Thursday that Venmo would become a payment option on Uber in the coming weeks.

Uber is “a great use case for shared transactions,” PayPal’s Chief Operating Officer Bill Ready told MarketWatch, because it lets users split the fare among friends and share comments about a ride on their Venmo feeds. Engagement around transactions is one thing that “sets Venmo apart” from other peer-to-peer services, Ready said.

More than 6 million Venmo transactions specifically mentioned Uber in the past year, according to Ready.

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The Uber arrangement is a big-name example of PayPal’s broader efforts to make money off of Venmo, since users don’t typically pay when they merely send money to a friend through the service. The company has brought on a number of major players as payment partners over the past few months, but it’s also betting that smaller players will opt in to accepting Venmo for payments. Last month, PayPal introduced “smart” payment buttons that will be able to detect if an online shopper is a Venmo user and render a “Pay with Venmo” checkout button accordingly.

For more: PayPal, pioneer of checkout buttons, now wants to lessen the load

Additional monetization efforts include a recently announced physical debit card, through which users can apply their Venmo balances or other payment methods to a real-world purchase. And management said on PayPal’s latest earnings call in April that use of instant cash-out functions, which let users pay 25 cents to access their Venmo funds more quickly, has been “dramatically accelerating.”

From January to April, 11% of Venmo monthy active users engaged in a monetized transaction, the company has said.

Don’t miss: PayPal says Venmo is starting to pay off

Jordan McKee, an analyst at 451 Research, told MarketWatch earlier this week that young adults seem like they’d be willing to use Venmo to pay for items from actual merchants, especially given that many Venmo users hold money in their balances on the app. He said they may become more willing to just buy things with their balances instead of using a traditional debit card for the purchases.

“In that type of scenario, I could see Venmo becoming fairly threatening with younger account holders,” McKee said.

Rival P2P offerings including the Cash app, owned by Square Inc. SQ, +2.41% are making monetization pushes as well. Instinet analyst Dan Dolev estimated Wednesday that Square monetizes “well over a third” of all transactions done with the Cash app.

See also: Square just shared its bitcoin financials and investors aren’t pleased

Zelle, a P2P service that’s offered by the big banks, has been demonstrating quick growth along with its rivals, and it’s trying to gain traction as a platform for disbursements. In other words, Zelle sees potential in convincing insurance companies, for example, to pay out funds using Zelle rather than write a check to policyholders.

PayPal shares are up 57% over the past 12 months, while the S&P 500 SPX, +0.68%  has gained 14%.

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