On Tuesday Amazon announced that it will soon allow customers to pay for purchases with the mobile payment service Venmo. The option is now available to select customers, and Amazon said the rollout will be complete in time for Black Friday in November. 

The e-commerce giant pitched the partnership as a way to give customers more payment options, presenting Venmo as one among a suite of others. 

“We want to offer customers payment options that are convenient, easy to use, and secure—and there’s no better time for that than the busy holiday season," said Max Bardon, the vice president of Amazon Worldwide Payments, in a press release. "Whether it’s paying with cash, buying now and paying later, or now paying via Venmo, our goal is to meet the needs and preferences of every Amazon customer." 

For Venmo, which is primarily used for peer-to-peer transactions rather than purchases from merchants, the deal has the potential to be a game-changer.

Lana Swartz, an associate professor of media studies at the University of Virginia and author of New Money: How Payment Became Social Media, said partnering with Amazon could give Venmo the opportunity to break out of the "closed loop" that limits payment networks. "In a way, the Amazon-Venmo deal opens up the closed loop of Venmo a bit: You can use it to pay on Amazon, where you can buy pretty much anything." 

Payment systems, going back to the Diners Club Card in the 1950s, have always struggled to break out of their respective silos, said Swartz, but the trend has accelerated with mobile payment services.  

"For example, I can’t pay from my Cash App account to your Venmo account directly," she said. "We’re both in two different closed loops and don’t interoperate."

However, Swartz noted that as payment technologies break out of their silos and become more universal, it raises the chances of a monopoly forming. 

"If there isn’t competition for payments, there is less accountability," she said. "And when it comes to holding money and transacting, the stakes are high."

The big-name partnership comes at a promising time for mobile payment technology. A new survey from the Federal Deposit Insurance Corporation (FDIC) found that roughly half of U.S. households in 2021 used a non-bank payment service such as Venmo.