With smart phones like the iPhone becoming an increasingly essential part of our lives, it was only a matter of time that online payments between friends became part of our daily lives — and an app called Venmo is seeking to nab the corner on that market.
The app allows users to send money to another person who has as Venmo account, as Forbes highlighted.
The concept is pretty simple: If I lend my friend $200, rather than having to go to the bank and get cash or write him a check, I can simply use the Venmo app to transfer money from my bank account to his.
The app was created by former freshman college roommates Andrew Kortina and Iqram Magdon-Ismail after the two realized the inconvenience of paying each other back with cash. Design for the app began in the spring of 2009 and the initial text-based version of the app became available later that year.
Since then, Venmo isn’t the only company delving into the mobile payments market, with apps like Isis popping up as well. In total, there are dozens of companies like Venmo vying for a piece of the mobile money transfer pie. But Venmo is one of the most successful payment apps. In August 2012, just five months after Venmo launched publicly, it was acquired for $26.2 million by Braintree, the system that handles payments for companies such as Uber, Airbnb and LivingSocial.
Originally, Venmo was limited to managing transactions between individuals and not for making purchases from a store or major retailer. However, over the last few months the company has expanded its app, allowing Venmo users to make purchases on apps that support their service. Venmo will store your credit card information via a secure server and if the app supports making purchases through Venmo, you can import your credit card to make a purchase.
Venmo charges no fee for debit card transactions, but does charge a 3 percent transaction fee for credit cards.
Currently, Venmo is primarily seen as a convenient way for friends to share money with one another, but the app is slowly making a dent into the online retail marketplace. Venmo certainly has a lot of promise, but with dozens of other companies out there competing for digital dominance, only time will tell whether this app will gain traction with major retailers or remain a niche app for friends.
