Venmo: A New Way to Pay Back Friends

Splitting a check with a friend at a restaurant can sometimes be a hassle. And there is no telling how many times the phrase “I’ll pay you back tomorrow” has turned out to be a false statement, only adding up the dollars owed amongst friends. This is a problem that a new mobile tool looks to fix.

As described on their own website, Venmo is kind of a combination between your wallet and phone. However unlike similar services which are directed towards more of a business-consumer relationship, Venmo focuses on more social aspects. At its most basic, Venmo is an app you can get for your iPhone, Android, or Blackberry. Then using this app you can both give and receive payment from friends who also have the app.

This easy ability to pay people back has a lot of uses, such as paying someone back for a meal, paying or receiving rent from someone, or even using it to send someone a birthday gift. So where does this money come from? The money comes from a credit or debit card that you link to your phone. Venmo will lead you through process when you sign up. And in order to receive money, you just need to connect your bank account to Venmo. There are plenty of banks partnered with Venmo such as Bank of America, PNC, and even Chase which means the Sapphire includes this benefit, as well as many of Chase’s other credit cards.

So you may be thinking that there’s a catch to all this. What exactly is Venmo’s angle? Surprisingly, Venmo is completely free. The app can be downloaded for free and there are no transaction fees whenever you make a payment. Though Venmo isn’t currently making money, it is planning on expanding and creating partnerships with businesses. Transactions with businesses would then have a fee, but payments among friends will remain completely free.

Venmo also has some other features to help sweeten the deal. Transfer of payments is overnight, so you can have money you received in your bank account very quickly. You can write notes to attach to payments in order to include things like what the payment is for and where payment was made. Venmo can also provide statistics for you so you can keep track of how much you’re spending, where you’re spending it, and who you’re spending it with. And of course, due to its social nature you can share payments with friends on Facebook, Twitter, and Foursquare.

Venmo is something you can easily get your friends to join, especially if it means they’ll actually be getting paid back. Its secure, fun, and most importantly streamlined and easy to use. Venmo has a lot going for it, but it has yet to be seen if it can adapt to the business environment as well.

 This was written by Kayvon, from Credit Card Forum.

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