There are dozens of financial apps but Venmo has proved it is here to stay. According to their website, the financial app had $1.6 billion dollars of transactions in the first quarter of 2016. It is no secret that the dynamic of banks’ relationships with their customer has significantly increased online. Venmo’s dominance with millenials is increasing the incline of the steady downfall of their relationships financial institutions.
What is Venmo?
Like PayPal, it allows anyone at any bank to exchange money from their mobile device. You submit your routing number and debit or credit card and vewla! It takes about 24 hours for your bank to approve the app and then you’re free to exchange the mula. Users can accept transfers and request transactions from other users with one click and boom. Money exchanged. It seems like a hassle, but it took me five minutes to set it up (I even timed myself.) Venmo gets your account approved by your bank for you. However, this does come at a price, Venmo charges a 3% charging fee for your transfers. A unique feature to this mobile banking app is the social networking aspect. Any user can attach a message with emojis to their payments and other users can like it or comment. Simplified explanation: you’re sharing transactions with friends.
Convenience is key
You’ve probably heard that one before, but it best summarizes the millennial lifestyle and what Venmo capitalizes on. This app has blown up with millennials and it’s not a surprise—about one in four millennials carry less than $5 cash on them seven days a week according to Independent Community Bankers of America. Many traditional banks have focused on building more branches and ATMS for convenience , whereas Venmo caters to the fact that millenials rarely visit banks and don’t carry cash. The hassle of getting up and walking to the ATM or inside a bank has been completely eliminated. This is concerning for many institutions because they capitalize on their personal relationships with customers, however, customers now prefer electric relationships.
“The crown jewel of all finance apps” – Forbes
Mobile money isn’t a new thing, so what makes Venmo so special? Unlike traditional mobile banking, this app isn’t owned by a bank institution and doesn’t require a local account. Furthermore, Venmo allows users to send transactions to any account, even if other users are linked to different banking institutions. Lastly, it’s available for any smart phone, which is its advantage over Apple pay. Venmo is catching fire because young adults and teens aren’t the only ones using it —businesses are starting to accept Venmo as a form of payment. Additionally, There is now pressure on financial institutions that offer mobile banking to incorporate social features. Social experiences are embedded in the millennial lifestyle and is a unique feature separating Venmo from its competitors.