Venmo aims to make mobile payments social

Venmo introduces a person-to-person payment app that encourages social sharing

Venmo, a venture-funded East Coast startup, Tuesday publicly launched a person-to-person payment app that emphasizes sharing payments on social networks.

Drawing on a credit card or a linked bank account, users send money to another person in much the same way they would a text message. The app lets users include a note about what the payment was for, similar to using a paper check. It also invites users to share their notes on their Venmo activity feed and on the social networks Facebook, Twitter and Foursquare.

Venmo claims that, prior to moving out of a two-year private beta Tuesday, it was processing roughly US$10 million a month.

Payments don't jump out as a real-world activity that users are clamoring to share on social networks, but, according to Venmo co-founder Andrew Kortina, most payments have been shared.

"It's not obvious at all, which is maybe why no one has done it," Kortina said of sharing payment information. He and co-founder Iqram Magdon-Ismail, who were freshman-year roommates at the University of Pennsylvania and have been friends since, developed the app for themselves and then wanted to notes with their payments to one another. But they weren't initially sure other people would use the app the same way.

"If you go out with your friends to a bar, a movie, a restaurant or a trip, all these things cost money," Kortina said. "And all these fun things are things you're going to tell your other friends about who weren't there. They're already social things that you're paying for, so it sort of does make sense that you would want to share them with your friends."

According to IDC analyst Aaron McPherson, social payments are increasingly on companies' radar.

Venmo also verifies users by requiring them to connect through their Facebook accounts, which McPherson said is an advantage over email-linked payment services like PayPal. "The thing about social networks is that people generally only have one identity," he said.

Like most other person-to-person payment services, Venmo transfers will be slowed down by the Automated Clearing House infrastructure on which they rely for non-credit card payments, McPherson said.

"I've yet to see a mobile payments system that doesn't use ACH," he said, "but you need to be careful with that because sometimes it takes two days to make a transfer -- and it can take 5 days."

Venmo is currently free for ACH transactions. Users get US$500 in credit card payments free, but then begin paying a 3 percent fee. Asked how the company would generate revenue, Kortina said that Venmo was currently focused on making its payment system "fun and easy." But he suggested that the app may eventually allow individuals to pay bars and restaurants, for example, and in that case Venmo would charge the merchants a small fee.

Cameron Scott covers search, web services and privacy for The IDG News Service. Follow Cameron on Twitter at CScott_IDG.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Cameron Scott

IDG News Service
Show Comments

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

George Khoury

Sharp PN-40TC1 Huddle Board

The biggest perks for me would be that it comes with easy to use and comprehensive programs that make the collaboration process a whole lot more intuitive and organic

David Coyle

Brother PocketJet PJ-773 A4 Portable Thermal Printer

I rate the printer as a 5 out of 5 stars as it has been able to fit seamlessly into my busy and mobile lifestyle.

Kurt Hegetschweiler

Brother PocketJet PJ-773 A4 Portable Thermal Printer

It’s perfect for mobile workers. Just take it out — it’s small enough to sit anywhere — turn it on, load a sheet of paper, and start printing.

Matthew Stivala

HP OfficeJet 250 Mobile Printer

The HP OfficeJet 250 Mobile Printer is a great device that fits perfectly into my fast paced and mobile lifestyle. My first impression of the printer itself was how incredibly compact and sleek the device was.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?