Amazon To Quit PayPal's Venmo in January

Amazon is removing PayPal's Venmo as a payment method for Amazon.com and its mobile app on January 10, an Amazon spokesperson told Kiplinger in an email.

“Customers can still use nearly a dozen other payment options, such as debit cards, credit cards, checking accounts or installments to pay for their orders,” the spokesperson said. She did not provide details about why the Venmo decision was made.

A PayPal spokesperson told Kiplinger in an email that the company has a strong relationship with Amazon and that it looks forward to continuing to build on that.

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"Customers can continue to add their Venmo debit card or credit card to their Amazon wallet to pay on Amazon," the PayPal spokesperson said. The debit card, through Mastercard, is connected to a user's Venmo balance, according to the Venmo website. The credit card is a Visa credit card issued by Synchrony Bank.

Venmo became available as a payment option on Amazon in October 2022.

Sector faces scrutiny

The news comes amid the growing popularity of digital wallets and payment apps, which face federal scrutiny. Last month, the Consumer Financial Protection Bureau (CFPB) proposed holding these payment services to the same standard of consumer protection as their more established banking counterparts.

"Payment systems are critical infrastructure for our economy. These activities used to be conducted almost exclusively by supervised banks,” CFPB Director Rohit Chopra said in a statement. The agency's proposed rule would "crack down on one avenue for regulatory arbitrage by ensuring large technology firms and other nonbank payments companies are subjected to appropriate oversight," he said.

In June,  a CFPB report found that billions of dollars stored on payment apps such as PayPal, Venmo and Cash App may lack federal insurance.

Users of payment apps can take steps to better protect themselves from hidden risks, the CFPB said. These include reading the user agreement, considering pass-through insurance that may be offered by the apps, and regularly moving your money out of the apps and into an FDIC-insured account.

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