Venmo aims to make mobile payments social
Venmo introduces a person-to-person payment app that encourages social sharing
IDG News Service - 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 share 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 five days."
Venmo is free for ACH transactions. Users get $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.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- The Critical Role of Support in Your Enterprise Mobility Management Strategy Most business leaders underestimate the importance of tech support when they choose an EMM solution. Here's what to put on your checklist.
- Separating Work and Personal at the Platform Level: How BlackBerry Balance Works BlackBerry® Balance™ separates work from personal on the same mobile device, right at a platform level. Find out how it can work for...
- Protection for Every Enterprise: How BlackBerry Security Works Get an IT-level review of BlackBerry® Security, addressing data leakage protection, certified encryption, containerization and much more.
- Future Focus: What's Coming in Enterprise Mobility Management (EMM) Find out why Enterprise Mobility Management (EMM) solutions that are truly future-ready must be designed to enable Machine-to-Machine (M2M) capabilities and much more.
- Live Webcast On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Live Webcast Unmasking the Differences between Consumer and Enterprise File Sync & Share The consumerization of IT combined with the rapid pace of the modern mobile workplace is forcing enterprise IT teams to evaluate file sync...
- Live Webcast Workforce Mobilization for Improved Productivity A mobility research director from Aberdeen discusses reasons for extending legacy applications to mobile devices, and an integration strategist from Attachmate shows how...
- Getting Ready for BlackBerry Enterprise Service 10.2 Find out how BlackBerry® Enterprise Service 10 helps organizations address the full spectrum of EMM challenges, while balancing the needs of both the...
- Containerization Options: How to Choose the Best DLP Solution for Your Organization This webcast outlines a framework for making the right choice when it comes to containerization approaches, along with the pros and cons of... All Mobile/Wireless White Papers | Webcasts