By Mohammed Waseem
We all know PayPal as a successful money transfer service, but do we know that they have an interesting mobile payments service? They have a mobile app of their own but its not about that; they have bought the mobile transfer app Venmo, which enables users to transfer money to their friends and family. They were previously acquired by Braintree for $26.2 million, and this time, PayPal acquired Braintree for $800 million.
PayPal is owned by eBay, which acquired the former in 2002. With all these acquisitions, eBay aims at accelerating its mobile payments revenue. In 2012, PayPal processed $14 billion in mobile payments.
Venmo is an interesting app, which is fast, secure and reliable. Users can hold money in their Venmo account, which is their mobile wallet, or can pay using bank accounts or debit and credit cards. They aim to become as common as Visa, as far as payments are concerned, and as widely used as Facebook. In fact, a few people consider Venmo a combination of PayPal and Facebook. The app users are increasing at a rate of 15% every month. Venmo also offers solutions to business through the service called ‘Venmo Touch’. They charge businesses for each transaction.
Venmo allows users to exchange payments with their social circles via their smartphones. The app links the users’ Facebook friends and email contacts to their bank accounts for the purpose of transfers. Interestingly, friends who the users have opted to “trust” can automatically withdraw funds from their accounts. It also has an option to share expense details, where, expenses among friends can be viewed, if the users do not choose to set their expense activity to privet.
Users can send money via phone (i.e. text message), email or Facebook. Another interesting feature of the app is Venmo Nearby, which allows users to send money to those they are not friends with. This feature lets the users search for nearby Venmo users and send money to them. It uses Bluetooth and WiFi to search for users. This feature is available to iOS users and not yet to Android and Blackberry users.
Venmo payments can be cashed out into bank accounts overnight, but if the users choose not to cash out, the funds get accumulated in the mobile wallet – Venmo account. Most users can transfer up to $3000 every week. All transfers are free of charge, except when credit cards are used, in which case, 3% fee is applicable. Recipients are not charged any fee for receiving the money. The service is currently available, only in the US.
Venmo owners predict that people won’t be swiping cards in 2017, as mobile payments are projected to cross $90 billion. There are other apps like Google Wallet and PayPal itself, but they charge a fee, which puts them behind Venmo in competition.