Blog: Venmo App Makes P2P Transactions Social (March 2013)

By Joseph DeSetto, Emerging Payments Blogger

A continuous stream of posts with witty comments or pop culture references is nothing new online after years of Facebook, Twitter and various other social services. But when the same type of feed appears in social commerce app Venmo—available online and on a mobile device near you—the effect is still a little discomforting to those of us who remember the pre-social network world and have some thought that financial transactions and privacy are at least loosely related.

Venmo is a well-designed, intuitive interface that makes sending money to a friend, colleague, family member or freelancer quick and easy. Unless you use a credit card as your account funding source, the service is also free. This combination of ease and inexpensive use already has attracted many of the digerati as an alternative to more established services like PayPal, especially as a mobile payment option.

A single tap creates a new payment, much like composing an email. The app uses your existing address book from your smartphone and indicates current Venmo users with an icon. While anyone with an email or phone number can be sent a payment, the recipient must create an account with Venmo to collect the money. If you try to pay someone that doesn’t create an account within 30 days, the money you tried to send is credited back to your Venmo account.

A unique feature of Venmo is the social aspect of the transaction descriptions. By default, all payments made are posted to a public timeline, much like Twitter. You can set your default to private, and also set privacy on each specific transaction. In a public post, amounts are removed, but the person(s) involved and description remains. This is the strange new world of social mobile commerce, as transactions are now another activity to tell the world about. It struck me as little odd to have normally private transactions appear in a list with thousands of other random people.

For many of us who think of bank statements, Quickbooks or Mint when we see a payment description field, the idea of spelling out who and why money changed hands to the entire world is a bit too exposed. But after reading the public timeline of transactions for a few minutes, it was clear that the strategy of posting payments—with amounts removed—as if it were any other social activity was, well, paying off.

First, social media savvy early adopters use the description field for everything from pranking their friends, such as listing items they probably didn’t really buy or are illegal, to just having fun or saying thanks for lunch. Secondly, the scroll of transactions is actually comforting. One of the biggest barriers to acceptance for new payment apps is the trust factor, and reading along as many—presumably thousands of—others are using the app generates confidence that Venmo is here to stay and knows something about keeping your bank account data safe.

When I used Venmo for the first time (to pay a freelance developer who was already a user of the app) I chose the privacy option. But, it’s easy to see how payments in apps such as these will increasingly be just another social data point that many will have no problem sharing. In a world full of open public disclosure about even financial transactions, it stands to reason that apps without Venmo’s social features may have a harder time gaining new users. Even with public profiles that include March Madness bets, bar tabs or splitting rent with roommates, Venmo is tapping into a generation of users that continuously has shown that ease, convenience and speed trump personal privacy concerns.

Joseph DeSetto is Paybefore’s emerging payments blogger and program manager of the Mobile Development Bachelor of Science degree at Full Sail University. He is the author of The Business of Design and previously served as chief technology officer for two mobile startups. If you’d like to comment on this blog post, please join the conversation on our Paybefore LinkedIn Group.

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