Venmo is a mobile payment service that is now a part of PayPal. It allows users to transfer money between one another using a mobile phone app or web interface. In the third quarter of 2014, Venmo processed $700 million of payments between people[2] and amasses over 1.5 million distinct users.


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 is used for their transactions. They can link their bank accounts, debit cards, or credit cards to their Venmo account. Credit cards have a 3% fee for each transaction.[3] If a user does not have enough funds on Venmo itself when making a transaction, it will automatically withdaw the supplemental funds from the registered bank account or card. This service is optimal for splitting a cab with friends, a lunch tab, or for when someone forgets their wallet at home. This also ensures that "not having cash" will not be an excuse for not paying back a friend.


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 during 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.[4]

In 2012, Braintree acquired Venmo for $26.2 million. In 2013, PayPal acquired Braintree for $800 million.[10]. 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 are accepting Venmo as payment. Initial launch partners include meal delivery service Munchery, and ticketing app, Gametime.

Social Component

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.[5] This mimicks that of a social media feed. The transactions can be made private, but most users do not change the privacy settings, as it is an opt-in feature.[6]

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 unauthorized transactions.[7] These security claims have been questioned by journalists, security researchers, and the California Office of Business Oversight.[8][9][10]