What is Venmo?
Venmo often describes itself as a digital wallet. It is a web browser or mobile app that allows people to send payments to others on the network in the United States. The payment service is owned by Paypal. Once Paypal came to be the owners of Venmo, they adjusted the app to be able to transact with any merchants that accept Paypal.
How does Venmo work?
Venmo works as follows: an interested person downloads the app and then transfers cash to the app by bank transfer, which can take up to three days. Most transactions that involves a debit card is peer-to-peer and instantaneous. At maximum the money is loaded onto the platform and available to use by the 3rd day mark. The cash transfer option, like a banking transaction, can take up to three days to move from account to account. The app claims to encrypt all user data and transaction information so that the application is safe and secure.
How does Venmo make money?
Venmo is able to make money by charging a 3% fee on payments conducted by credit cards. This is currently the only way that the company is able to make money. The reasoning behind this is that Paypal, the parent company generates enough revenue on its own and Venmo acts as outreach to bring more customers under the Paypal payment solution umbrella. The fee for credit card payments is said to cover total operating expenses for the company.
The most recent big development for the company was when Paypal extended the use of Venmo to all merchants. From here there has not been much news, but there is a lot of talk about how to further monetize this popular app. They are working to combine additional apps to integrate the Venmo P2P functionality with the ability to purchase things such as baseball game tickets through Gametime, or meals through Munchcery. These adaptations are just the beginning of what the company could be doing. In case anyone is interested in creating new developments within the company, they are currently hiring, also.
The app was actually created by a couple of best buds in college. They would always be borrowing cash from each other and wanted a better way to keep track of it and be sure that they were paying each other back. Just to put it in perspective, the company handles over a billion dollars in transactions a month.