Venmo is a payment app available on two platforms: iOS and Android. It allows for easy and quick money transfer between individuals. The best part is that it is free to use. As of now, the service is only available in the US and only the US customers having an American bank account and mobile number are able to access the features of Venmo.
It was founded in 2009 and it started as a text message-based payment delivery system. Then the company came with an integrated social network in 2012 to make the platform better and in accordance with the growing demand.
It was then acquired by Braintree, the mobile payment system in the same year for $26.2 million. Then, the company got a bigger boost when Braintree was acquired by PayPal Holdings Inc. for $800 million. This was a crucial step that showed clear and rapid progress for Venmo as PayPal was a big name at that time and it is still the biggest name in the payment industry.
The user base of Venmo increased drastically when PayPal acquired Braintree and so the transactions on the platform skyrocketed too.
What things can one do on Venmo?
Users can send money to their connections via a debit card, credit card, or directly from their bank account using the app. Similarly, they can receive the funds from someone on their app and that money can then be transferred to their bank account.
Users have to just add money to Venmo and start sending money to anyone they want, the process is quite simple and user-friendly.
You can even split dinner, just send text messages to your friends and families, and chat with them, send a birthday gift, and do similar other activities. It is a kind of social media interaction tool too as you can chat with your friends and families. Have a look at what products they are buying and can like and comment on it.
You can even pay payments on different mobile apps using Venmo.
Sync your account with Facebook or phone contacts and send money to the respective person.
There is a 3% fee when you do any transaction using a credit card. When you do any transaction from your bank account, Venmo account balance, or a debit card then it is absolutely free.
You can also take the benefit of using the Venmo debit card. You can use this card for the shopping you do over this platform and you will also earn cashback as well. There is a disable card button included in the app that can be used when you lose the card. You can enable the button when you get the card back.
How does Venmo make money?
Now, the question that might be popping up in your head that how the company makes money if it is providing its services for free. The app is free to download, registration doesn’t involve any charges, transactions done with Venmo balance, debit card, and from a bank account are having zero charges then how does the company run its business?
This is a curious question and everyone needs the answer to this so let us make you know.
One way of income for the company is the transactions that are done using the credit card. Users have to pay a flat fee of 3% of the transaction value.
Another source of income for the company is the partnerships with the businesses. As we told earlier, Venmo has done partnerships with other businesses which include food-delivery company: Munchery, fast-food chain: White Castle, Uber, Ubereats, and many others.
So, when someone pays the bill to these apps using the Venmo API then Venmo charges a 2.9% business transaction fee. This is the main source of income for Venmo and it is going to increase the partnerships with businesses in the future.
This will increase the customer base as more and more people using the services of the different businesses will use Venmo to do the payment and in this way, Venmo will keep earning the 2.9% transaction fee. Also, check the details of the e-payment system.
Following are the businesses with whom Venmo has done a partnership currently:
- Urban outfitters
How safe is it to use Venmo?
Users will surely have a question whether it is completely safe to use this platform or not as it is an internet-based money transfer service and there are so many sniffing and hacking activities going on in the online world…
Will my money be safely transferred to the person whom I want to send? Is it safe to hold the money into the Venmo account and do the transactions? Is my personal information and banking information secured with this platform?
All these questions come to the mind of the users and it is completely ok to have all these questions and one must have them so that we can ensure that we are transacting on a platform that is safe and secured as, after all, we are dealing with our hard-earned money.
The question of whether the platform is safe or not has been thrown a couple of times in the past. It faced some issues and was reported to breach user security in 2016. There were some complaints from users over the company’s privacy policies when handling transactions and FTC (Federal Trade Commission) had investigated it and informed Venmo to keep a stronghold on the user’s privacy and security of the transactions. In this case, PayPal had paid the FTC charges after violating the Gramm-Leach-Bliley Act.
As per the website of Venmo, they have mentioned that they are following proper security standards to protect the privacy of the users and see that every transaction remains secured. Encryption is used to secure transactions. They don’t allow unknown users to do any transaction on the platform.
They even monitor the user’s account and activities to identify illegal and unauthorized transactions so that any hacking activity can be identified at the early stage and the culprits can be caught. This helps to keep the platform safe from any bad activities and the money of the users remains protected.
Users can add multi-factor authentication and use a PIN on the mobile app which are considered top-notch security measures.
If users think that someone has got unauthorized access to their Venmo account or in the case when they lose the phone then they don’t need to worry at all. They need to go to Venmo.com–>Settings–> Security and just remove the session that is associated with their phone and they will get logged out of their account.
So, here was an overview of Venmo and how to use Venmo. Hope you got clear information about it. If you are in the US and frequently sending money to your connections then you should definitely get yourself registered on the Venmo app and start using it for sending/receiving money.
Believe us, it will be a smooth, easy, and quick experience for you to use the app and get your money added into your bank account within no time so just give it a try! For more information, visit Financeshed.