Up until a couple years ago, Peter Ng was the only member of his Fantasy Football league still mailing a check to the commissioner each season. The 30-year-old financial advisor from San Francisco had tried out a few online payment systems in the past, but never found anything he thought was too friendly. That is until his friends told him about Venmo.
“Finally, they were like, ‘Hey, you have to get on Venmo. Everyone else in the league is doing it, and it’s just easier,’” says Ng.
Ng admits at first he was a bit hesitant to use the mobile payment system.
“It’s basically a text message with money, right?” says Ng. “But all the young guys in the office were doing it, so I took a leap of faith.”
Now, Ng is one of many millennials using Venmo on a weekly or daily basis—and the only thing he uses his checkbook for is his HOA fees.
“Out here in San Francisco, I feel like Venmo is very institutionalized. I mean, to the extent that it’s a verb—‘to Venmo someone,’” says Ng. “It’s hard for me to imagine something else replacing it or something else being easier.”
Transactions With a Side of Social
Launched in 2012, Venmo is one of several free apps that allow users to pay other users instantly through their smartphones (others include PayPal, Google Wallet and Square Cash).
To use the service, you download the Venmo app, create a username and password, and connect it to a bank account or a debit or credit card. You then can send money to or request money from other Venmo users, whom the app makes easy for you to find by pulling in your friends from Facebook and your phone contacts.
With every Venmo transaction, you have the option to share news of the payment with your friends on Venmo and the community of Venmo users worldwide. They’ll see, for example, if you just split dinner at an awesome new restaurant or paid someone back for an epic concert—and they can “like” and comment on it in their newsfeeds.
For many users, this social component unique to Venmo makes the payment process more fun. These days, we share everything with everyone—why not our finances? For others, however, it makes them uneasy.
Matt Meier is one of many Millennials using VenMo.
“I’ve had someone pay me for lunch and then a friend of that friend ‘liked’ that transaction, and I was like, ‘I don’t like that. It really weirds me out,’” says Matt Meier, a 28-year-old creative director and graphic designer from Denver. “I always set my transactions to only [be shared] between the participants of the transaction.”
Settling Up Made Easy
Meier primarily uses Venmo to divvy up rent and utilities between him and his three roommates.
“I just forward them the utility bills that I get via email and say, ‘Your portion is $8, your portion is $25,’ and then they’re very good about paying me right away,” says Meier.
Meier says he’s had roommates in the past who weren’t paying rent, or roommates on the other end of the spectrum—those who kept “exponential spreadsheets” detailing who owed whom what.
“I had a roommate in college who was a spreadsheet queen,” says Meier.
Beyond living expenses, Meier also uses Venmo for entertainment. Everyone in his circle of friends uses the app, and they often pull it out to split the cost of group activities.
“If we go to the movies, someone will pay the bill instead of waiting in line and everyone taking their turn to get their ticket,” says Meier. “And the same thing with concert tickets because of the transaction fees. It’s easier if one person fronts it, and we all kind of contribute that way.”
Ng uses Venmo similarly with his friends—whether he’s splitting season tickets to the Golden State Warriors or organizing a bachelor party for a group of people, some of whom he doesn’t know. Ng says Venmo is especially helpful for transactions with younger co-workers and friends.
“If you go out for dinner or drinks at a bar and foot the bill for someone who’s in their early 20s, I feel like you’re probably not going to be paid back unless you have Venmo,” says Ng.
Ng and Meier both say that in several years of using Venmo, they’ve never experienced any security issues. They both password-protect their phones, and they only use the app with people they know.
“I’m not too concerned about fraud as much as forgetting to input the decimal point in the right place,” says Ng. “It’s so easy to send and receive money back and forth, that on a couple occasions I’ve had to catch myself, ‘Oh wait, got to put in the decimal point.’”
However, there have been reports of Venmo users being hacked, like in this story from Slate magazine. It details how one user had his account compromised and debited for a $2,850 payment to someone he didn’t know. Although the user eventually got his money back from his bank, it took him numerous phone calls and emails to resolve the situation.
As with any mobile financial app, it’s important to take precautions to protect your money and information.
- Never make a payment to someone you don’t know, especially for items such as event tickets and Craigslist purchases.
- Set up a PIN within your Venmo account that you’ll have to enter before making any transactions or account changes. (Make sure it’s different from your phone password.)
- Change your notification settings to notify you via text, push notification and email of any transactions and account changes.
- If you lose your phone (or someone steals it), log in to your account settings online and revoke access to your account from that device.
- If you notice anything suspicious within your account, immediately contact your bank or credit card company and Venmo support via email or Twitter.