Venmo is a mobile payment service owned by PayPal. It allows users to transfer money between one another using a mobile phone app or web interface. It handled $7.5 billion in transactions in 2015, and nearly $3.2 billion in the first quarter of 2016.
Cash transfers using Venmo aren't considered instantaneous and can be cancelled after an initial transfer is sent. These transfers can take one to several days to transfer. The Better Business Bureau reports a few scammers exploit the fact of this on Craigslist and additional services.
Venmo is a mobile payment service that lets users transfer money to each other. It follows a similar business model to PayPal. Venmo describes itself as a "digital wallet". Users sign up and create an account by providing basic information and bank account information using their mobile app or on the Venmo website and they can find others who have created an account. Friends and recipients of transactions can be found via phone number, Venmo username, or email.
Users have a Venmo balance that's used for their transactions. They can link their bank accounts, debit cards, or credit cards to their Venmo account. Credit cards have a three percent fee for each transaction. If a user doesn't have enough funds on Venmo itself when making a transaction, it will automatically withdraw the supplemental funds from the registered bank account or card.
Venmo was founded by two friends, Andrew Kortina and Iqram Magdon-Ismail, who met as freshman roommates at the University of Pennsylvania. According to Kortina, the idea of Venmo originated when Magdon-Ismail forgot his wallet throughout a trip to visit Kortina. The process of settling their accounts was a hassle, so they started working on a way to send money through mobile devices. Their original prototype sent money through text messages, but they eventually transitioned from text messages to a mobile app.
In 2012, Braintree acquired Venmo for $26.2 million. In 2013, PayPal acquired Braintree for $800 million.. Prior to October 2015, Venmo strictly prohibited merchants from accepting Venmo as a form of tender. On January 27, 2016, Braintree announced that Venmo is currently working with select merchants who're accepting Venmo as payment. Initial launch partners include meal delivery service Munchery, and ticketing app, Gametime.
A unique aspect of Venmo is its social aspect. When a user makes a transaction, the transaction details (stripped of the payment amount) are shared on the user's "news feed" and to the user's network of friends. This mimicks that of a social media feed. The transactions can be made private, but most users don't change the privacy settings, as it is an opt-in feature.
Security and Criticisms
Venmo has claimed that its security is bank grade, and that personal and financial data are encrypted and protected on secure servers to guard against any unauthorised transactions. These security claims have been questioned by journalists, security researchers, and the California Office of Business Oversight.