{"id":1207,"date":"2015-10-04T20:14:03","date_gmt":"2015-10-05T00:14:03","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-digit\/submission\/just-venmo-me\/"},"modified":"2015-10-19T18:10:27","modified_gmt":"2015-10-19T22:10:27","slug":"just-venmo-me","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-digit\/submission\/just-venmo-me\/","title":{"rendered":"Just Venmo me."},"content":{"rendered":"

\u201cGuys, I\u2019ll pay for this one and you all can just Venmo me.\u201d <\/em><\/p>\n

As adoption of Venmo\u2019s interface for peer-to-peer payments has increased significantly, this phrase is becoming all too common in everyday conversations amongst millennials.<\/p>\n

How does it work?<\/strong><\/p>\n

Venmo allows users to create an account by syncing their major US bank or debit card information to their profile, and allows users to transfer money to friends (as long as they have Venmo accounts). Using Venmo\u2019s clean, sleek, and intuitive interface, users can easily search their contacts or Facebook friends. (They can invite friends who are not currently users by sending them a pre-populated text through their contact list.) Users then click who they want to pay, write in an amount, and write a caption of what this payment is for. No transaction fee. And can be accomplished with as little as 4 clicks.<\/p>\n

Venmo is technically a finance app, and competes with players such as PayPal (although they own Venmo) and other financial service applications like Wells Fargo SurePay. But if traditional finance apps only experience growth at about 10%, why is Venmo getting all this hype and experiencing a growth rate at over 60%?<\/p>\n

The answer is almost as simple as using Venmo\u2019s app \u2013 network effects<\/strong>.<\/p>\n

\u201cGuys, I\u2019ll pay for this one and you all can just Venmo me.\u201d <\/em><\/p>\n

\u201cI don\u2019t have Venmo.\u201d<\/em><\/p>\n

\u201cWait, you don\u2019t have Venmo?\u201d<\/em><\/p>\n

Venmo\u2019s value for a user increases the more his friends become users. For one, this allows him to pay or request payment from a wider circle of friends, making it easier to split a dinner bill, pay rent to his roommate, or give some gas money to a friend.<\/p>\n

Venmo\u2019s Facebook-like newsfeed has added another aspect to this financial app \u2013 a social network. The newsfeed allows users to share (if they want to) and view other friends\u2019 payments. The newsfeed does not show the dollar amount, rather it shows who paid who, and for what. These \u201cfor what\u201d captions tend to be humorous and creative (let\u2019s put it this way, the default option is a \u201ckale salad\u201d) and create a fun story about what friends are up to \u2013 who\u2019s went for drinks with who, or who got charged for a flight to Florida. These are intermixed with various emoji icons that do their best to tell their own story of what happened. Venmo\u2019s newsfeed has become a haven for inside jokes between friends, and the source of users spending time \u2013 other than time spent actually transferring money \u2013 on the app browsing the newsfeed, just like one would do with Twitter or Facebook.<\/p>\n

What\u2019s next?<\/strong><\/p>\n

Venmo\u2019s almost \u201covernight\u201d success begs the question, how long will this continue? What does another entrant need to do to pull away some of Venmo\u2019s increasing share in this space? While banks such as Wells Fargo are becoming more and more interested in this space, what should they be focusing on? Before Venmo, one may have answered this question with \u201ceasy to use\u201d, \u201cfree\u201d, and \u201cintuitive.\u201d But now, is \u201csocial network\u201d a vital ingredient for success in this space?<\/p>\n

More importantly, will Venmo leverage their ever-increasing base of users to expand into a new space? Emerging peer and technology-based markets such as peer-to-peer lending could hold significant promise for a company like Venmo.<\/p>\n

For now, we can expect Venmo\u2019s user base to continue to expand, payment captions and emojis to become funnier, and (hopefully) your roommate to accept your Venmo charge for last month\u2019s rent.<\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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