PayPal is confident the rollout of its Venmo QR codes can help monetize the peer-to-peer payments network. During the company’s second-quarter earnings call, Daniel Schulman, PayPal CEO, said the QR code rollout will target merchants that consumers use daily, creating deeper customer relationships.

“We are going to put aggressive marketing dollars behind this to make sure that consumers know they can use QR codes,” Schulman said. “That’s a large part of the investment that we’ll do in the back half of this year.”

According to PayPal, Venmo users sent $37 billion on the network during the second quarter, up from $31 billion in Q1. Despite this growth, PayPal has struggled to monetize Venmo since acquiring the network in 2013 as part of PayPal’s purchase of Braintree.

In May, PayPal rolled out QR code payments to 28 markets, including the U.S. Customers can scan merchants’ QR codes with their phones for contactless payments. The company announced today that CVS Pharmacy will be the first merchant to offer the service in the U.S., meaning customers can pay with their Venmo balance or linked payment account at any of the 8,200 CVS stores in the U.S. In a statement, PayPal said the QR codes will be available in all CVS stores in the fourth quarter.

Schulman said that while the QR code strategy will take time, PayPal is working with “more than 100 large enterprise merchants across the U.S. and Europe.” He added that merchants want to tap into the “150 million to 175 million people who are using our digital wallets” between PayPal and Venmo. According to Schulman, PayPal will charge a percentage of the transactions to monetize QR code payments.

See also: PayPal highlights Venmo profit strategy

PayPal has used a Venmo debit card and the ability to pay online merchants with Venmo to help monetize the platform. Venmo also features an instant transfer function that charges a 1% fee, and PayPal CFO John Rainey said on the earnings call that the Venmo credit card should launch later this year. In November, PayPal acquired the digital coupon platform Honey, which Schulman said could drive adoption of the QR code payments in combination with proximity messaging and rewards. 

“That’s the functionality that will roll out over the next six months,” Schulman said. “This value proposition is one that I really like.”

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