With simplicity of design, ease-of-use and social engagement as its greatest strengths, Venmo is becoming the standard for how millennial customers think about peer-to-peer payments.
Beyond a convenient way to split a bill and pay family and friends instantly, Venmo’s Facebook-like interface for peer-to-peer (P2P) payments has become a social network approach to mobile finance. And, as social media continues to define how people interact with their phones, this app can actually be the most natural way to manage payments between friends.
Venmo launched in 2011 after remaining in beta testing for two years. Just a few months after its release, it was purchased for $26.2 million by Braintree, the same payment processing company for social startups like Airbnb, Uber and LivingSocial. So when PayPal acquired Braintree in 2013, it also gained Venmo as a star player on the PayPal team.
Most people already know PayPal as the most widely used peer-to-peer payment network. But PayPal charges a 2.9% transaction fee with each debit or credit payment. Venmo, on the other hand, is completely free when used with a major U.S. bank and debit card. There is a 3% transaction fee only when used with a credit card. So, as opposed to trying to take a cut of each payment, Venmo has created a new type of social dialogue around payment transactions.