Venmo is having an awesome year so far. PayPal’s peer-to-peer (P2P) mobile payment app processed $5.6 billion in transactions during Q4 2016. That’s an eye-watering 126 percent increase from the previous quarter. But our research shows that small business owners haven’t jumped on the bandwagon yet. They’re more likely to ask, “What is Venmo?”

GetApp surveyed 500 U.S.-based small business owners to ask if they manage customer payments using Venmo. The answer? A resounding “No.”

Key Findings

  • One in three small business owners hasn’t heard of Venmo;
  • 81 percent of small businesses are not using Venmo;
  • Two percent of small business owners use Venmo to manage customer payments…
  • …but more than 10 percent have employees who use it outside of work.

Details of the research

Respondents answered the question: “Is your small business using Venmo to manage customer payments?”

#1. Yes, we process customer payments using Venmo – 2%

#2. No, we don’t use Venmo at all – 51.1%

#3. No, but we use Venmo to pay employees – 1%

#4. Some members of staff use it informally – 10.9%

#5. I don’t know – 5%

#6. What is Venmo? – 30%

Why we asked this question:

People love paying for things on their iPhones. The mobile payments market is projected to be worth $62.49 billion this year in the U.S. alone. And one in three U.S. smartphone users is forecast to use proximity payments at least once every six months by 2020.

But this doesn’t mean that dominance is assured. Gartner’s research on the mobile payments market shares some reasons why tools like Venmo aren’t even more popular:

“A key issue mobile payment providers face today is the lack of value for both consumers and merchants,” Gartner Analyst Sandy Shen wrote in her report, Market Trends: Mobile Payment – The Way Forward. “Most providers tried to match the experience of cash and card payment, while offering little benefit beyond payment.”

Since mobile payment use is on such an upswing – and Venmo is growing so quickly – we wondered if U.S.-based small business owners have started using it for work. The fact that they’re (mostly) not seems to align with Gartner’s market analysis.

Next best steps:

More research is needed to dig deeper into our results. For example, Shen’s report noted that the food and beverages industry leads mobile payment adoption. It’s worth knowing if this is true within the small business space as well. If a different industry is leading mobile payment adoption at the small business level, this could have a parallel market impact in years to come.

But since our initial data suggests that adoption is so low among U.S.-based small business owners – and one in three doesn’t know what Venmo is – there is a different, crucial first step: education.

“Venmo is mostly used by people under 35, though the demographics are expanding,” Shen says. “Most businesses still use the traditional payment methods – e.g. debit, credit, PayPal – and they are not aware that they can also support Venmo for payment. So there is the market education part as well.”

Small businesses are known for using new technology to reach consumers faster than traditional providers. It’s how Uber upended the way we travel and AirBnB became our home away from home. But if small business owners don’t adopt technology that their customers are using, they risk losing to competitors that do.

“Be present at places where your customers are,” Shen says. “If your customers are using mobile apps for shopping and payment, and expect to have a frictionless experience, you have to support that.

“There are integration services in the market that makes such integration quite straightforward. So experiment with these new payment options to see the impact on your business. Do the business analysis to see whether the incremental revenue driven by new payment options outweigh the cost of integration.”