
Venmo Five Years Ago - mnewberg
https://medium.com/@thenewb/venmo-five-years-ago-3d361563b98f
======
habosa
Venmo was started by UPenn alums so it was popular among my friends long
before it was a phenomenon (one of my good friends interned there and wrote
the BlackBerry app).

I used to use it exclusively by SMS starting around 2011. It used to be smart
enough where I could text in "Pay John $5 for food" and it would figure out
which John I meant and do it. I loved that.

It's been amazing to watch Venmo grow to what it is now. If I could only keep
three apps on my smartphone, I would choose Uber/Lyft, Venmo, and Google Maps.
I can't navigate my life without all three of those.

In my last year of college my Venmo year in review showed that I had spent
$17k on Venmo and received $18k. So not a huge net, just a constant movement
of money in and out among my friends (rent, food, parties, etc). If I had to
use cash we would have never been able to make the small things work, and if I
had to use PayPal I would have accrued $100s to $1000s in fees.

So basically: thank you Venmo. You make my life measurably simpler.

------
superuser2
Venmo is an objectively worse experience to Square Cash in every way. Bank
accounts rather than debit cards, difficult Facebook-linked discovery, stupid
social networking integration, obtuse UI.

Square Cash is beautiful, elegant, and effortless. I encourage my friends to
use it over Venmo whenever I can. Unfortunately, Venmo is wildly more popular
among people I know.

~~~
nemothekid
I'd have to argue with "objectively" \- many of your gripes are subjective.

The bank account vs. debit card is one time on setup - and has little to do
with day to day interaction. Not do I see how the UI is obtuse - it takes 3
clicks to pay someone.

The one legitimate gripe you have (the facebook/social network), is a plus in
my opinion - in the sense I can pay anyone by just knowing their name. Friend
of so-and-so is throwing a party? I can look up their name and throw in, _and_
there is an in-app log of the transaction.

I use Cash to send/receive money to my mom. I never have to worry about the
the amount sent, what was it for and when it was sent and who it was sent to
because its my mom. Its rarely the same for my friends.

~~~
saturdaysaint
"The bank account vs. debit card is one time on setup - and has little to do
with day to day interaction. Not do I see how the UI is obtuse - it takes 3
clicks to pay someone."

I like Venmo, but I vehemently disagree here. Every time I recommend Venmo to
someone who hasn't heard of it, I have to explain why they should give their
banking information to a company they've never heard of. It's an onboarding
disaster. I recommend Google Wallet to most people now since it's both a
trusted name and doesn't require linking to a bank. My conversation is usually
as simple as "Hey download Google Wallet - it's an easy way to zap money
between people - and send me $x".

~~~
Yomammas_Lemma
Also, if your Venmo account gets compromised, it's a fucking nightmare. I
think this slate article summed up most reasonable persons' concerns pretty
fairly:

[http://www.slate.com/articles/technology/safety_net/2015/02/...](http://www.slate.com/articles/technology/safety_net/2015/02/venmo_security_it_s_not_as_strong_as_the_company_wants_you_to_think.html?wpsrc=fol_fb)

------
moron4hire
They were the darling startup of Philadelphia for a while. Proof that Philly
could compete and grow successful technology companies. Our hackerspace used
them to manage membership dues because PayPal was such a pain in the ass, and
we really liked supporting a local business. One of our members was supposedly
good friends with one of the founders, got us setup as a non-profit with them
so we didn't have to pay transaction fees. A lot of us started using Venmo to
share lunch costs both in the space and with our coworkers back at our jobs. I
even convinced my landlord to start taking payment through Venmo; he loved it.

I remember hearing Venmo talk in one of the local tech press blogs about how
much they loved Philly and were never going to move. Then literally a month
later they had moved to NYC.

And then they conveniently "forgot" about our non-profit status, but didn't
email anyone about it, and didn't report on the transaction fees in the same
data stream as the rest of the app. I was treasurer at the time, and couldn't
figure out why my spreadsheet balance tracking all of our accounts didn't
match Venmo's balance. I had to do a special data export to find the
transaction fees. And that data export was just to a CSV file, one that didn't
quote fields with commas or escape newline characters correctly. I seem to
remember the export wasn't even on the account page, you had to go find it
under some obscure settings page.

I quit using them after that, and haven't looked back. When you're a non-
profit, community-owned-and-operated hackerspace (as opposed to a for-profit
fab-lab like TechShop), it's really hard to get people to pay their dues on
time (or at all). Literally all we needed was money for rent and internet, the
management was rotating volunteer basis, nobody got paid. Any amount of money
that is expected and doesn't come through is a huge hit to the bottom line.

------
XaspR8d
I've yet to see a payment app reach any major usage in my social network,
which is extremely fragmented among Google Wallet, Snapcash, PayPal, Square
Cash, Popmoney, Simple, bank-specific apps i.e. Chase Mobile... (Weirdly
enough I don't know anyone using Venmo, though I'm familiar with it from HN
and the like.) It seems like everyone _wants_ a simple payment app, but
there's a huge 'sign-up fatigue' from the fragmentation, and no single app has
reached a useful saturation. I wish I were seeing the "viral spread" others
see and don't really even care much about feature parity. :\

~~~
avn2109
That's odd. Literally 95% of my friends are on Venmo, with the only holdouts
being the people who refuse to grant account withdrawal permissions to a third
party.

~~~
cauthon
I don't like the "bucket" approach or Venmo's emphasis on linking to Facebook,
so I don't have an account and use Square Cash or BofA transfers instead. I'm
the exception though, I'd agree that the vast majority of my friends use it.

------
josephpmay
For those who are older, Venmo is used today probably more than cash by
college students (for things like paying a friend back, paying membership
dues, paying to get into a party, etc.)

~~~
RankingMember
I'm weird but I feel like cash is superior for those applications and doesn't
require me to hand my credit card number out to yet another company.

~~~
untog
But it does require you to walk to the nearest ATM, withdraw the nearest round
amount to the amount you need, then somehow try to get change from your friend
(or just call it even) then walk around with the remainder.

I get what you're saying, but it isn't difficult to see why people find Venom
a better option. What is exactly that bad about Venmo having your credit card
number? You're protected from fraud anyway.

~~~
toomuchtodo
Write check, friend deposits with mobile check deposit app. Everyone has a
bank of some sort, I have yet to meet anyone who is using Venmo.

~~~
Jtsummers
It's friction. If you have two entities providing the same service (money
exchange), but one is easy to use and one is much harder to use, the easier
one will win (all other things being equal.

Check method:

    
    
      Needed items:
        Payer - checkbook, pen
        Payee - phone
    
      Steps:
        Payer        Payee
        Write check
        Give check   Receive check
                     Sign check
                     Use app to photograph and submit check
    

Venmo method:

    
    
      Needed items:
        Payer - phone
        Payee - phone
    
      Steps:
        Payer            Payee
        Send $x to Payee
    

A similar occurrence in the financial field, mobile banking. Depositing checks
via phone is easier than going to an ATM which was easier than making it to a
physical branch of the right bank during business hours.

Cash is a better equivalence to Venmo, but only works when you're physically
collocated. And then requires one or both parties to carry around cash (and
it's not as easy to be precise, if you care about getting it right down to the
penny).

~~~
toomuchtodo
How do you handle someone who won't install Venmo and sign up for their
service? Not pay them back?

~~~
Jtsummers
Switch back to cash, check or another transfer mechanism. Or have them buy the
next round at the bar and call it good.

------
paxtonab
I'm really surprised that Venmo started as an SMS service, not a mobile app.
It blows me away that the product has been around for that long and evolved to
the point that it's at now. Funnily enough this is also how Shazam started.

I think it really speaks to the execution aspect of a startup - be good at
doing 1 thing, create a committed user base and then scale. According to the
article Venmo's target audience was originally college kids who didn't have
cash on hand to pay food trucks... Now they're doing $700mm in transactions.

------
habosa
Question: does anyone know how/if Venmo makes money or is it just a loss-
leader for Braintree/PayPal?

I use it for thousands of dollars of transactions a year but I have never paid
a penny in fees or seen an ad. People claim that Venmo acts as a bank and
invests my carried balance but I can't imagine that's lucrative enough to pay
all the bills.

~~~
ahstilde
Venmo, I believe, invests the money it holds. This is why it takes 3 days to
cash out.

~~~
habosa
I tend to get cashouts in 24h now.

------
sksksk
Something I find interesting about Venmo, Square cash etc... is how they
target shortcomings in the US Banking system.

In the UK, pretty much anyone with a bank account can go to their bank's
website and transfer money to any other bank account in the UK instantly, and
for free.

Every bank has their own interface, some better than others, but it works well
enough that I don't think Venmo could ever take off here.

------
silveira
Venmo is one of my favorite services. A very simple and effective UI. I have
been using it extensively since 2011 with a group of friends, and it's amazing
how easy it make to split restaurant bills or any other kind of expense. I
just wish more people were using it.

------
mlrtime
It is spreading like a virus (in a good way) in corporate as well. We use it
to pay each other for lunch. I now use it to pay my cleaning lady.... I'm glad
to support something that isn't paypal. Hopefully Venmo stays small and lean.

~~~
aaronmacy
PayPal owns Venmo.

~~~
habosa
I think the exact sequence of events was Braintree bought Venmo for ~$25M and
then later PayPal bought Braintree.

------
pkamb
> It was riding the twitter wave in letting you interact with handles
> (usernames) over SMS.

I'm curious, were any of these SMS service comparies successful _as_
interactive SMS services?

It seems like most of the services like Twitter, Venmo, etc. "started" as SMS
services but quickly moved to apps once the iPhone appeared. And only then did
they blow up. But maybe I'm wrong about that. What does Twitter/Venmo non-
notification SMS usage look like today?

Are there any big/popular _interactive_ services today that are mainly
accessed by SMS?

~~~
dublinben
M-Pesa moved over a billion dollars by SMS in 2014.

------
kloncks
_In summary- it’s so awesome to see how they went from scrappy to a must-have
product that does around $700mm in annual transactions._

Where is this from? Venmo should be doing much higher than this figure.

~~~
mnewberg
My bad... fixed now. That was from a slate article last year. They are doing
much more than that on a quarterly basis.

------
boggie1688
I'm so surprised that Venmo has not been acquired. You think someone like
Paypal, Android Pay, or Apply Pay would buy them.

~~~
josephpmay
Venmo is owned by Paypal

