Venmo is a mobile payment service owned by PayPal. It allows users to transfer money to one another (within the U.S. only) using a mobile phone app or web interface. It handled $12 billion in transactions in the first quarter of 2018.
Cash transfers using Venmo are not instantaneous and can be canceled after an initial transfer is sent. The transfers can take one to three business days to become final. The Better Business Bureau has reported that some people have used confidence tricks to exploit the cancellation feature via Craigslist.
Users create an account via a mobile app or website and provide basic information and bank account information. Recipients of transactions can be found via phone number, Venmo username, or email.
Users have a Venmo balance that is used for their transactions. They can link their bank accounts, debit cards, or credit cards to their Venmo account. Paying with a bank account or debit card is free, but payments via credit card have a 3% fee for each transaction. If a user does not have enough funds in the account when making a transaction, it will automatically withdraw the necessary funds from the registered bank account or card.
When users first create an account, total transactions cannot exceed $299.99 until their identity is verified. After their identity has been verified, users can send up to $2,999.99 in each seven day period.
Venmo includes social networking interaction; it was created so friends could quickly split bills, whether that is for movies, dinner, rent, tickets, etc. When a user makes a transaction, the transaction details (stripped of the payment amount) are shared on the user's "news feed" and to the user's network of friends. This mimics that of a social media feed. There is a "world wide" venmo feed, a "friends only" feed, and then personal feed. Venmo encourages social interaction on the application through comments using jokes or emojis and/or likes. Early on, Venmo required new users to sign up through Facebook, which made it easy to find peers they wanted to pay and also provided Venmo with free marketing. If you aren't Facebook friends with someone who you need to Venmo, the application gives you the opportunity to search by username and phone number. Profiles are personalized with profile pictures, usernames and Venmo transaction history. The transactions can be made private, but most users keep the default and do not change the privacy settings. Venmo does not have either buyer or seller protection.
Venmo includes three social feeds: a public feed, a friends feed, and a private feed. By default, all Venmo transactions are shared publicly. Anyone who opens the app to the public feed, including people who do not themselves use Venmo, can see these publicly shared posts. The privacy settings can be changed so that all posts are either shared only with a user's Venmo contacts, or even kept private. If posts are shared only with contacts, they still appear in a friends feed, whereas private transactions are only visible to the two parties involved in the transaction. If two users involved in a single transaction have differing privacy settings, Venmo applies the most restrictive level. Users can override their overall preference for any individual transaction, including after the transaction has been made.
Each transaction includes a description of what the payment is for in text, emoji, or both. This description is required to complete the transaction, but Venmo does not enforce content requirements (e.g., someone could describe the transaction as "nothing"). Venmo recommends emoji when a common expense is entered as the description. Overall, 30% of Venmo transactions include at least one emoji.
Regardless of a transaction's privacy, only the two people involved in a transaction can see the transaction's amount. Transactions are persistent within the feed and scroll infinitely. A previous transaction may be difficult to revisit if a user or their contacts have many transactions.
Venmo's social model has caused researchers' attention. A research group from University of Washington thought the social awareness stream (SAS) in Venmo differs from other SASs in that it is driven by the app's financial functionality. Posting is dependent on using the app's core functionality, financial transactions. A user could make a trivial transaction to make a post (e.g., sending someone $0.01, or requesting $0.02), but only one participant in their studies reported ever doing this. Further, neither reading the feed nor sharing a transaction memo publicly or with friends is necessary to send or receive money.
On Venmo, people transact with both friends and businesses via the app. Analysis of public transactions identifies a spectrum of use patterns, from regular users who create transactions for a variety of expenses, to niche users who use Venmo with a small cluster of friends to pay for just a few things (e.g., bills among roommates). While this prior research describes a range of public uses of Venmo, it cannot describe people's experiences with the application and its SAS or their use of transactions that are private or shared only with friends.
Venmo has claimed that its security is bank-grade, and that personal and financial data are encrypted and protected on secure servers to guard against any unauthorized transactions. Journalists, security researchers, the California Department of Business Oversight (DBO) and the Federal Trade Commission have all questioned these claims. In February 2018, the FTC settled with Venmo, after an investigation uncovered false representations about "bank grade" security and failures to comply with the Gramm-Leach-Bliley Safeguards Rule and Privacy Rule. Under the settlement, Venmo will be required to undergo third-party audits every two years for the next ten years. The FTC also complained that Venmo "misled consumers about the extent to which they could control the privacy of their transactions" and misrepresented the availability of funds for withdrawal. Venmo states that customers need not worry about their security or privacy, and encourages users to set up a PIN to increase security.
Venmo was founded by Andrew Kortina and Iqram Magdon-Ismail, who met as freshman roommates at the University of Pennsylvania. According to Kortina, the duo were initially inspired to create a transaction solution while, in the process of helping start a friend's yogurt shop, they "realized how horrible traditional point of sales software was". At a local jazz show, Kortina and Magdon-Ismail conceived the idea of instantly buying an MP3 of the show via text message. Finally, the idea was cemented when Magdon-Ismail forgot his wallet during a trip to visit Kortina. The process of settling their debt was a considerable inconvenience, especially compared to the possibility of mobile phone-based transactions. Shortly after, they began working on a way to send money through mobile phones. Their original prototype sent money through text messages, but they eventually transitioned from text messages to a smartphone app.
In May 2010, the company raised $1.2 million of seed money in a financing round led by RRE Ventures.
In 2012, the company was acquired by Braintree for $26.2 million.
In December 2013, PayPal acquired Braintree for $800 million.
Prior to October 2015, Venmo prohibited merchants from accepting Venmo payments. On January 27, 2016, PayPal announced that Venmo was working with select merchants who would accept Venmo as payment. Initial launch partners included Munchery and Gametime. All merchants that accept Paypal can now accept Venmo.
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Source of the article : Wikipedia