The Paypal-owned payment app wins by turning transactions into chats
Venmo is king when it comes to sharing the wealth. Now it needs to capture a piece for itself.
The Paypal-owned app processed $17.6 billion in mobile payments in 2016, up 135% from the previous year. And users exchanged $6.8 billion last quarter alone, which is double the transactions made during the same period last year.
“Sending money between friends – like digging out a checkbook or finding an ATM – was really burdensome. It was also really awkward,” Venmo spokesman Josh Criscoe told Moneyish.
So how does one make splitting the check or paying rent easy and entertaining? Add emoji.
Venmo has become the most popular money payment app among Millennials; of the 65% of 20 and 30-somethings who use payment apps, more than two-thirds (68%) of them use Venmo, compared to the 22% using their own bank’s mobile app, according to a recent LendEDU survey.
And it’s sped past other person-to-person (p2p) apps like Google Wallet and Square Cash by turning transactions into conversations. Users can nudge their friends to pay up for last night’s margaritas or respond to a request to kick in for utilities on a chat screen that’s similar to a Facebook or Twitter feed.
“Sending your friends a note and including an emoji [like a wine glass or a winged stack of cash] takes the awkwardness out of asking your friend to pay you back for their portion of the bar tab last night,” said Criscoe. “Venmo has married the social element and the financial element, which no one else has been able to crack, and that’s what really sets us apart.”
In fact, he said users are checking the app even when they’re not making a financial transaction themselves just to see what their friends are spending money on.
“We see folks logging into the app daily just to look at the feed,” said Criscoe. “They love sharing cryptic inside jokes with each other using emoji, and it’s fun to try and crack the code on what your friends are doing.”
The pizza slice is the most used emoji, with the house or winged money (for rent) and wine and beer glasses (for nights out) rounding the top five, according to another LendEDU survey that studied Venmo transactions.
Venmo lets users withdraw and receive money from any bank or credit card account, free of fees. This makes it easy for the consumer to manage money, but at the expense of Venmo’s profit for now, Criscoe admitted.
“We always say that paying your friend back for pizza shouldn’t cost more than your slice [in fees], and Venmo bears the weight of those costs to make it really easy and simple for you to get your money,” he said. “But the idea is that over time, Venmo will start connecting consumers with merchants, and ultimately the merchants will cover the costs of the service.”
PayPal and Venmo began rolling out Pay With Venmo last year, which connects Venmo with a handful of merchant apps like White Castle, Munchery, Delivery.com, GameTime and Parking Panda. And they announced this week that consumers will be able to use Venmo to pay at any PayPal merchant this year.
“Anywhere you see that yellow PayPal button, you’ll be able to pay with Venmo,” said Criscoe, who’s also looking toward other opportunities for connecting users with merchants, such as exclusive branded emoji. “That’s where we want to go from here.”
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