I’ll be honest, I only just downloaded the Venmo app on my phone this week. It is borderline embarrassing, but I had to ask a “young” co-worker how I could send and receive money. Apparently no one uses PayPal anymore which was news to me…
So what is Venmo? Venmo is actually a payment service owned by PayPal. It’s a simple way to transfer funds using either a credit card, debit card, or a bank account. According to their website, Venmo enables you to do 4 things:
- Send money confidently
- Connect with people
- Make Purchases
- Quickly transfer money to your bank
I found it surprising that a fund transfer company put connect with people as number 2. My blog post will focus on this aspect and why it is unique and crucial to the company.
Social Media Aspect
Unlike other payment methods, Venmo has a strong social influence. Similar to Facebook, users have a friend network and a newsfeed. This allows you to see the transaction history of your friends but excludes the amount of the transfer. PayPal CEO commented that “Venmo users open the app four or five times a week. But they only do transactions a couple of times a week,”. This means that half of Venmo use if purely for the social media aspect. The Wire wrote an article describing that the newsfeed “has become one of the most interesting, informative social networks out there. But don’t say that too loud, or you’ll feel like a creep.” This is because it is literally documenting the who/what/when of all your activities. Companies would KILL for this type of big data. As a new user of Venmo, I never contemplated the social aspects. Just now realizing that I have been flashing the intimate details of my life to hundreds of my closest friends.
Platform for Amateur Comedians
Because of the public newsfeed, Venmo also serves as a platform for joking around with your friends. A Bloomberg article included a study on which emojis are used the most on Venmo. No surprise that a flying sack of money and pizza were the top icon. What I do find interesting in their by hour study is the prevalence of eggplant. Someone used it 500 times in a single transaction..
Thought I was being funny by paying my liberal friend with the comment Trump 2016 Campaign Donation. Can’t figure out if she didn’t notice or if she just doesn’t think I’m funny…
My “young” co-worker that I mentioned earlier let me in on his own personal Venmo joke called “TRUST”. He said that he transferred a friend $1,000 with the comment “TRUST” to see if the friend would send it back. Luckily for him, there was trust in the friendship and the money was sent back. Not quite sure I am willing to take that risk but it’s just another sign that Venmo is so much more than just a cash transfer service.
I was able to stumble across one instance of a Venmo joke gone wrong. Someone wrote “ISIS beer funds” as a bad joke and ended up getting their money seized by the government (Office of Foreign Assests Control). Moral of the story: make sure your jokes aren’t something that would raise a flag to the government.
Social Media Evolution
When you think about the evolution of social media, it makes sense that Venmo could be the next “fad”. We transitioned from Facebook, which included long posts, pictures, videos, etc. Then came Twitter, which was basically a Facebook status with a character limit. After that we saw Instagram, which was basically just the photo feature of Facebook. Then Snapchat, which is arguably a barebones and selective Instagram with self-destruct features. The next step in the minimalist social media world could be Venmo: a one sentence update on what you are doing and with whom.
Above and beyond the user social media functionality, Venmo also is becoming a way to promote your business. The newsfeed shows when a user pays a business. It is free advertising to that entire person’s friend network. Friends can even comment and ask questions about the purchase. Another benefit for business is the relief of responsibility. Venmo handles all the payment data and customer interaction, including a quick and simple checkout experience.
Right now Venmo has something that the other platforms do not: non-advertising related revenue. Instead of making money off of advertisements, Venmo invests the money that sits in user accounts and conducts quick trades. They are not reliant on advertising revenue and therefore users are not bombarded with the same noise as other social media platforms. In my mind, this gives them an opportunity for longevity that the other platforms do not have. Or even better, the opportunity to make even more money by adding advertising revenue to their topline.
Like everything else in this world, there’s a shift to instant gratification through technology. If you don’t already have Venmo, I recommend you jump on the train. While writing this blog I checked Wikipedia’s Timeline of social media, Venmo is not listed. I wonder how long it will take before the page is edited…