Looking for ways to simplify payment transactions?
Working in the real estate industry means dealing with numerous daily payment transactions – paying contractors, wholesalers, receiving rent payments – whatever the reason may be, it’s super convenient to do all these payment exchanges online.
Aside from the convenience, transacting online:
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Saves precious time and effort in accepting recurring payments online rather than through check or money order
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Keeps track of all your transactions and expenses since everything is organized and readily available for review online
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Is usually easy and user-friendly
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Lessens the risk of losing paper checks and money
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Can be very low (or no) cost to have all this convenience
Knowing the hassle of payment transactions, two former roommates aimed to solve the problem.
Iqram Magdon-Ismail and Andrew Kortina founded a text message-based payment app in 2009 because they were inconvenienced with constantly writing checks or cashing payments.
Since technology is on the rise and many day-to-day tasks are accomplished using smartphones, they came up with a viable solution.
What is Venmo?
Venmo is an app that changes the common payment methods such as cash, checks, wire transfers, ATM fees and cards into a paperless and cashless transaction.
It eliminates the need to write or deposit checks, go to ATMs or make wire transfers. Venmo acts as a digital wallet that enables you to send and request money to pay restaurant bills, rent payments or other daily transactions.
Venmo publicly launched in 2009 and in a span of 5 months they became so popular that they were bought by Braintree, a well-known payment processing service with reputable customers such as Uber and Airbnb, Inc., for $26.2 million. In 2013, PayPal acquired 
Braintree for $800 million and the company became an owner of Venmo, instead of a competitor.
In late 2016, Venmo accumulated $5.6 billion in payments making them one of the most popular payment processing platforms online. Much like Ubering and Googling, the app’s popularity leads people to use Venmo as a verb: ‘Venmo me.’ Or, ‘I Venmoed you the rent payment.’
Other than sending or receiving money, Venmo is also a social network that is similar to Facebook’s Newsfeed…
You have the option to publicize your transactions, limit it to your Venmo friends or make them private – where only you can see them. The app displays who you’re sending money to or who you’re receiving it from along with the description of the transaction. It does not display the dollar amount associated with each exchange.
This is one of the reasons why Venmo is popular with the millennials.
How Does It Work?
Venmo is user-friendly and straightforward when it comes to sending or requesting money.
All you have to do is:
a) Download the Venmo app (obviously) from the App Store or Google Play.
b) Sign up and verify your account here or directly through the app. You can either connect with your Facebook account or sign up manually with your email address, name and number.
c) You will then be prompted to add your card and account details.
d) You can add, search, and invite friends.
For sending or requesting payments:
a) You have to find the friend you want to transact with either through:
1) Your Facebook friends connected through Venmo, or
2) Look for them using a phone number, email or Venmo username
in the Venmo database.
b) Put in the dollar amount you want to send or request and write a description of the transaction.
c) You will then select whether you want to ‘pay’ or ‘request’ money from your friend and then send it.
It usually takes 2 days for the money to be removed/transferred to your account.
What Are Venmo’s Fees?
Another reason why Venmo gained popularity is its zero to low cost.
The app is a free-to-use platform and relies on transaction fees to generate revenue. But what’s amazing is that many of the app’s services do not charge transaction fees, which also includes the transfer of funds between Venmo friends through a debit card or checking account.
In other words, it’s free.
Sound too good to be true?
Well, Venmo does charge a 3% fee for payments via credit card to cover processing costs.
How Secure is Venmo?
The security of Venmo has been under close examination.
There have been issues regarding security breaches of user accounts and the company’s inability to notify email users if changes in their account are made – such as changing the passwords or email addresses, making it easier for hackers to get into your account.
The company acknowledged these concerns and strengthened their security.
Venmo uses bank-level security and data encryption to protect the interests of the users from unauthorized transactions. Users are also able to protect their accounts by setting up a PIN code and/or fingerprint verification for mobile application use.
If your account has been breached despite the safety measures, you will only be liable for $50 worth of losses if you immediately contact Venmo within 2 business days.
You can read more about Venmo’s security on their security page.
Look, just like any other online payment platform, Venmo has its drawbacks. But it all boils down to how you use it and the people you transact with.
Speak Up
Tell us about your experiences with Venmo in the comments section below.
Review Your Bank Transactions – With security such a big concern these days, it’s more important than ever to check your bank and credit card transactions for fraudulent charges.
Make it as Easy as Possible for People to Pay You – People want to avoid making payments to you. It’s human nature. Do everything you can to remove any excuse they have for not paying.
Avoid Money Transactions on a Public Wi-Fi Network. When doing transactions with a P2P (peer to peer) app, stay away from public Wi-Fi networks. It will be easier for hackers to get information, especially if these networks are not secure. For added security, create a strong password with every account associated with Venmo or any other online payment platform.