Venmo has made on-the-fly money transfers as easy as clicking a few buttons on a phone.
PayPal’s Venmo is taking mobile money transfers to a social level and the results are readily seen in the application’s growing popularity.
In the last quarter, the mobile money service saw growth of nearly 250%, driven largely by a millennial user base that prefers carrying smartphones over cash.
Venmo is a mobile money transfer application that is available for use on iPhones and Androids. The service makes on-the-fly money transfers to friends, family and others as simple as clicking a few buttons on a phone.
That ease has made it a popular choice on college campuses where users rely on it to split restaurant checks, pay for Uber rides, pay their share of rent and more without having to go to an ATM to pull out cash.
The service initially launched in 2011 and was snatched up by Braintree just a few short months after its release.
When eBay’s PayPal purchased Braintree in 2013, it gained ownership of Venmo, which it now sees as a key element in its own continued growth.
Differences Define Venmo
PayPal’s main interface and Venmo both serve a similar purpose: to make peer-to-peer money transfers seamless.
The two services, however, have some distinct differences. It’s those differences that seem to be drawing millennials to the Venmo app.
Unlike PayPal, which also caters to small businesses, Venmo is driven by individuals who are drawn to the app because of its lower cost of use.
Venmo does not charge users transaction fees when money transfers comes directly from major U.S. banks or debit cards.
Fees of 3% kick in only when a credit card is used to fund a payment. This lack of fees enables Venmo to easily substitute for cash in many settings.
Venmo also has a social element that sets it apart from other transfer services.
Using a Facebook-style interface, the app provides friend payment updates that don’t show cash amounts. The updates do, however, make it easy to see which friends shared a cab ride, ate dinner together and so on.
What the Future Holds
As Venmo continues to demonstrate its growth potential, PayPal plans to capitalize on it more going forward.
“This year, we intend to take the Venmo population and more fully integrate them into the PayPal ecosystem, so that Venmo users can do more than just do P2P transfers to pay their bills, but can actually work on the PayPal network to buy and transact with merchants,” Daniel Schulman, eBay’s president was quoted earlier this year as saying.
What that means exactly for Venmo’s growing user base remains unclear.
PayPal has officially split off from eBay as its own independent company, taking its entire unit, including Venmo with it.
