As cashless payments have come to overtake hard cash transactions, the use of peer-to-peer online payment services has skyrocketed.
The mobile payment service Venmo is making a big splash, having processed over $700 million in payments between people within the third quarter of 2014.That said, mobile payments in the United States alone are projected to top $90 billion by 2017.
Venmo is a free mobile app (currently only available in the U.S.) whose main promise is to mediate cash transfers. As Venmo’s GM Mike Vaughn explains “Venmo’s goal is to make sending money or giving money to people much easier, much simpler.” However, Venmo is not merely a payment app; it’s also a social network.
Owned by the well-established online payment giant PayPal, Venmo is a mobile app with a social twist. Users can sign up and find their friends via their Facebook and quickly register their credit/debit card and bank account through the app. Users can then send and receive money and develop a Venmo balance (a cash balance within the app) which can be ‘cashed out’ into their bank accounts at no extra fee.
When users pay one another, they are given the option to fill out a text field in which they describe the nature of their transaction. Subsequently, these transactions and their descriptions appear through a timeline (dollar amounts are not shown) shared among ones friends.With a large conglomerate of young adults as its primary users, Venmo’s money payment system is primarily used for expenses such as splitting a tab, or paying rent.
Nonetheless, despite being a free app Venmo is not a non-profit company and covers it’s processing costs by charging a 3% fee for credit cards and non-major debit cards. However, receiving money via Venmo is always free.
As the mobile payment industry grows, one should keep an eye on Venmo. Considering the ever-increasing reliance on mobile for everyday activities, money is soon to join the fray…