Venmo Me: A Closer Look at the Social-Payment App

Alison K. Lanier

The question, “do you have any cash on you?” has now become, “do you have your phone?” Apps like newcomer Venmo—which is rapidly stepping up in popularity with its streamlined, social-media oriented approach—have taken long strides toward easing digital payments between friends.

Nvate digital payments Paypal social-payment app Venmo

Services like Venmo have been repeatedly compared to the benchmark in money-sharing services, PayPal. PayPal is, needless to say, extremely well- established. It is used internationally for everything from payments between friends for drinks and payments to artisans at craft fairs to working-remotely paychecks.

It may not be necessary, though, to hold Venmo up too strenuously for comparison to PayPal—as it’s a unit of PayPal itself. Owned by Braintree, according to the Wall Street Journal, the real distinction between the two is Venmo’s focus on the social-sharing aspect for payments.

Social Sharing Features

Sending money on the Venmo app looks a lot like drafting a text message. First open the app, then type the name of the friend you want to pay—“$19 to Ally, for brunch—thanks!!”—and a notification pops up on the recipients phone with the payment and note. The cash is then there, in the user’s Venmo account, to be sent on to someone else in a new transaction or to “cash out” to the app’s assigned bank account.

It’s PayPal streamlined down to a wireless-generation science. “Venmo me,” a phrase increasing in popularity far faster than “PayPal me” ever did, attests to how successful the simplest app really is in terms of replacing visits to the ATM with a few taps of a fingertip on a screen.

The newsfeed of friend payments that greet the user when first opening the app is really the distinguishing feature—and also one that makes the app a little unsettling to approach, in my experience. I’ve yet to share a single transaction, publically in the app or when prompted to share on Facebook. Yes, you can keep transactions private. As long as there is a “recipient only” visibility option, I’ll take full advantage of it. But, I can see what Venmo is aiming for here. Besides giving the app a young, familiar face as a social tool, the payment newsfeed reassures users not only of the bulk of the app’s burgeoning popularity but also that their friends trust and use this service repeatedly, a kind of personally customized testimonial.

How Safe is Venmo?

Of course, the next question is security. Setting up the app is just as neatly packaged as the rest of its operation. Just give the app your debit card or bank account data, and you’re good to go. Another distinction appears here. While PayPal charges its usual 2.9 percent fee for a debit or a credit card, Venmo only charges that fee for a credit card, increasing its popularity with young people who are less likely to have credit cards.

Venmo is secured, in its site’s own words, “with bank-grade security systems and data encryption to protect you and prevent against any unauthorized transactions or access to your personal or financial information. Furthermore, we guarantee all user funds against any unauthorized transactions.” The security info page for Venmo is predictably and happily lengthy, with a neat battery of security features.

So far, so good. Venmo, despite its fresh face, popularity, and thus potential vulnerability—which, combined, one would think might make the app a hacker target—has been running seamlessly and securely. But of course that’s no guarantee. With Anonymous hackers claiming to have breached PayPal in 2012 and publishing the supposed data for 28,000 users in online files, nursing an assumption of absolute safekeeping online is, perhaps, premature. While that assessment may read as a word of warning, it’s hardly unique to Venmo. The not-so-little app is navigating the same security-battlefield where Google Wallet, SquareCash, and Paypal wage war.

Fee Freedom

What you can be sure of is where your money is going with Venmo. According to The Wall Street Journal’s side-by-side comparison, Venmo extracts fewer fees for a given transaction than Google Wallet, PayPal, or SquareCash. The exception—which is true across the board for all these services—is that the app does give money to iOS and Android, although, as noted before, Venmo debit transactions are free, unlike Google Wallet or PayPal.

Venmo, the youngest of the arsenal of digital payment options, may also be the brightest. The result of observation of these previous services, the app appears secure and styled expertly to a generation far more likely to carry iPhones than dollar bills. Once your app name is a verb, after all, you know you’re doing something right.

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