Venmo is growing ridiculously fast

Millennials still love their Venmo.

Payment volume for the popular money-transfer app, now owned by PayPal, grew 154 percent year over year in the first quarter of 2016 to $3.2 billion. That’s up from $1.26 billion in the same quarter last year.

Here’s what Venmo’s growth looks like over the last seven quarters.

Up and to the right!

The one nagging question around Venmo, however, is if the service can become a money-maker, instead of a money-loser, for PayPal. Today, Venmo doesn’t charge any fees for paying your friends in the app using a debit card or a direct connection to your banking account. So that’s the way most users fund their transfers.

But Venmo has to pay a fee to financial institutions on many of these transactions, making them money-losers for the company. Venmo does charge users 3 percent to use credit cards, but it’s a much less popular option as a result.

PayPal thinks it may have an answer. Earlier this year it launched Pay With Venmo, a service that lets Venmo users easily place purchases in apps using their Venmo account information. PayPal will charge app makers a fee for each transaction that goes through the new payment method.

PayPal CEO Dan Schulman said on Wednesday’s earnings call that 550,000 Venmo users now are eligible to use Pay With Venmo. The service will be available to all Venmo users by the end of the year, he said.

This article originally appeared on Recode.net.

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