Venmo, the mobile payment app owned by PayPal is churning out new features and services to keep its more than 40 million customers happy.
The most recent evidence: its instant transfer via a bank account feature it launched earlier in August. In a blog post, Venmo said the new service provides yet another way for customers to instantly access their funds. In 2018 Venmo added instant transfer of funds via a debit card, with customers paying a 1% fee for the convenience. It's now expanding that with the instant transfer to a bank account and maintaining the same fee scheme.
The new feature is part of Venmo’s efforts to maintain its momentum and continue to grow. It ended the first quarter with more than 40 million users who are considered active. When reporting earnings, PayPal Chief Executive Dan Schulman said Venmo is seeing “significant momentum” with user growth continuing to accelerate.
Mobile payments are becoming a big business, with Americans beginning to embrace the payment method like their counterparts in Europe. Being able to send money to a friend within seconds has lots of appeal for the masses. That is driving interest from all sorts of companies that want to capitalize on this trend. After all, it's not too cost-intensive to launch a digital payments company.
According to one publication, it costs between $100,000 to $150,000 for a startup to create a peer-to-peer mobile payment service similar to Venmo. It can be done for cheaper, but Appinventiv argues there is a bigger return if a developer includes all the features that Venmo offers. Some key ones include the ability to link bank accounts and debit cards, share purchases and make digital purchases.
But while the cost to launch is low, there's a reason not all the mobile payment companies have more than 40 million active users like Venmo. Venmo has been wildly successful because there is a social aspect to the act of sending money to friends, family, and co-workers.
Other peer-to-peer payment networks focus on the transaction, Venmo is all about being social. It’s Social Feed which lets people see what an individual in a network spent money on, is popular among its customers. Users can share payment activity with friends and comment on transactions. A user’s activity can also be shared with the entire Venmo public with customers able to react through the app’s feed. It's one of the big reasons Venmo resonates with millennials and those younger. Sharing every aspect of their life, even the mundane ones like splitting the bill for a meal is second nature for millennials. Venmo has tapped into that, which has led to its popularity.
“Venmo is not an inherently social app in the way of Facebook or Twitter, but it offers emotional support and the ability to keep in touch,” said Cliff Lampe, the social-media professor at the University of Michigan’s School of Information in the Appinventiv report. “Young people are good at repurposing feeds and emojis and signals to mean different things and to become social even when it’s not intended to be social.”