Tired of having to pay people back in cash or write them IOUs? Venmo is a very simple app that lets you send and receive money between friends instead. Whether you’re eating out with friends, paying someone for a used textbook or buying resale concert tickets, Venmo makes it incredibly easy and removes those awkward talks over who owes what.
What Makes Venmo Unique?
Venmo was founded in 2009 as a payment system through text message, and launched as a smartphone app in March 2012. Capitalizing on the growth of the peer-to-peer (P2P) economy, Venmo has quickly become a social network in itself, growing in size and popularity amongst millennials. According to Business Insider, Venmo processed $6.8 billion in payments in Q1 in 2017, an increase of 144% over the previous year and the service’s 15th consecutive quarter of doubling growth.
Every time a user makes a payment to a friend, they have to fill out a memo for what the reimbursement is for. The transaction, which does not show the specific dollar amounts to anyone but the participants, is then shared with both parties’ Venmo friends. Though users can adjust privacy settings so that transactions cannot be seen by friends, most do not. A large part of Venmo’s appeal as a social networking app is the ability to scroll through your friends’ Venmo activity as told through key words, inside jokes and emoji. Venmo has also given birth to a new verb — instead of telling someone, “Pay me back,” many have started saying, “Venmo me.”
How Does It Work?
In order to use Venmo, you need to link your credit card, debit card or checking account. From there, you can quickly and easily pay back friends you owe money to, or request payments from friends to remind them to pay you back, all while keeping track of your transactions. Your Venmo balance can be stored for use at a later date, or cashed out to a bank account.
While half the fun of Venmo is creating funny or snarky memos for your friends to see, you can change these privacy settings for specific transactions. Choose from public, where anyone can see your Venmo history, Venmo friends only, or just you and the other person within the exchange.
How Does Venmo Make Money?
Though Venmo is a free-to-use platform, it generates revenue through transaction fees. There are no advertisements within Venmo. Most of Venmo’s services do not require transaction fees, including transferring money between friends through a major debit card or checking account. However, Venmo does charge a 3% fee for credit card payments to cover processing costs.
As a college student, Venmo is completely indispensable to me. My friends and I use it when we go out to eat, to buy used textbooks or resale concert tickets, or simply to take the stress out of the “I forgot my wallet at home” moment. It makes paying people back incredibly easier, as I’ve come to realize that people my age rarely carry cash on them, if ever. As an app that provides a service and also a form of social media, Venmo is a great app that provides convenience and entertainment at the same time.