Venmo launches a check cashing feature for eligible users in the US, says it is waiving stimulus check deposit fees for a limited time
Kim Lyons / The Verge :
Context & Ripple Effects
Venmo had already begun extending beyond person-to-person transfers with in-app merchant payments, then launched that capability with early partners on iOS. Check cashing adds a way for eligible users to bring offline funds into the same wallet.
The limited-time stimulus fee waiver makes the feature more immediately relevant to users receiving those checks, while later coverage shows Venmo continuing to add uses for balances, including cash-back-funded crypto purchases.
First-order effects
- Eligible US users gain a new route to deposit checks into Venmo, with stimulus-check deposits temporarily carrying no fee.
- Venmo can turn check proceeds into wallet balances that users can use across its existing payment features.
Second-order effects
- Venmo’s merchant-payment effort gains a larger potential pool of funded balances, rather than relying solely on peer-to-peer transfers as the entry point.
- The temporary waiver makes fee treatment a product lever for Venmo when it seeks to attract deposits tied to a specific payment type.
Third-order effects
- Venmo’s product direction points toward a wallet that combines more ways to fund an account with more ways to spend it, from third-party app payments to later balance-based services.
- If that pattern persists, differentiation among payment apps will increasingly rest on the breadth of their funding and spending flows rather than a single transfer feature.
The trend: Venmo is broadening from a peer-to-peer payment service into a wallet designed to capture funds and keep them usable across more transactions.