Venmo has officially taken over my vacations. Everywhere I went this summer, I heard the words “Venmo me.” Even a few businesses I gave hard earned dollars to, asked me to use Venmo. I, of course, asked, “How about Zelle, can I use Zelle?” That was met with a total lack of awareness every single time. Venmo me, Zelle me, why P2P anyway? Well, my kids needed bucks for the vaca and ended up exchanging amongst themselves when they had to be paid back. My sisters and brothers also used Venmo and we were paying each other back all the time via Venmo.
So we did a survey this summer to try and better understand the Venmo phenomenon. We found 50% of the people we spoke to had Venmo. That dropped to 10% for 50+. Youngins under 18 DON’T use it. That’s right. High school kids don’t seem to use it but when they head off to college, it starts. And what about real-time? Almost no one cares, as 50% are leaving the balances in Venmo, never having to move it to a bank account which takes a day or two. So real-time is moot. If you leave it in Venmo, it is real-time.
Communities are key. People use Venmo within a community, like my family on vacation, or my little league. Or the college community. Everyone tends to use Venmo. It’s super easy. We took non-Venmo users and had them sign up to see if it really was easy, and it is. First-time users got registered and were transfering money in no time. Almost 100% got through first-time registration without a hitch. Venmo makes it very easy to sign up.
So what about bank P2P or Zelle? No one cares. Why? Lack of community. To use bank P2P, you risk not sending in real-time, well most of the time. Even with Zelle’s reach of 80%, that leaves 20% of all deposit accounts in the country not covered. That is too many. And how would a bank or CU creature community? They would try to get everyone to open a deposit account. Well, they would be required to do this, ie KY rules etc. Venmo doesn’t have this problem.
What is needed is a bank solution that DOES NOT force everyone to open a bank account. I’m not sure the regulators would be very keen on this. But this is the secret to Venmo, easy to form communities. One of the P2P vendors needs to get out there and develop this. Not sure who, but there is certainly an opportunity. We are all so focused on real-time that I fear we have missed the mark.
So, I am now an avid user of Venmo. If you like this Blog, Venmo me!