(Bloomberg) -- Amazon.com Inc. is ending the use of PayPal Holdings Inc.’s Venmo payment service for purchases with the online retail giant, a little more than a year after adding the option.
Venmo can no longer be added as a payment method in Amazon wallets, and customers who already have it enabled can’t use it after Jan. 10, according to a notice from Venmo. It cited “recent changes,” without further explanation. Amazon customers still will be able to use Venmo debit and credit cards.
PayPal and Amazon rolled out the partnership in October 2022, “with PayPal hoping to monetize Venmo more effectively, and Amazon looking for exposure to a new, younger customer base,” Evercore Inc. analysts led by David Togut said in a note to clients Thursday. “We expect this news is simply the result of a lack of traction, as consumers failed to adopt using Pay with Venmo as their preferred checkout method.”
San Jose, California-based PayPal, like many of its rivals in e-commerce, has been dealing with a slowdown on some of its platforms as consumers return to in-store shopping and slow spending because of inflation. The company is overhauling its senior ranks under new Chief Executive Officer Alex Chriss. PayPal is creating three new business units focused on consumers, small businesses and large enterprises.
PayPal shares slipped 1.8% to $58.46 at 1:15 p.m. in New York, ranking among the day’s five worst performers in the S&P 500 Financials Index. They have declined 18% this year, compared with a 4.3% increase for the S&P 500 Financials Index.
Read More: PayPal’s New CEO Forms Three Business Units, Names Their Leaders
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