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Guest Blog: SplitWise

My name is Seth, and I am also a student at GSU. Jasdeep and I had a class together and he asked me to share my thoughts on Splitwise. On Jasdeep’s post about venmo, he mentioned using an app called SplitWise as a method to split the bill when he is traveling with friends, and then used those totals to get his friends to venmo him the total amount. I wanted to talk more about this app because that along with venmo is a great combination. Using these two apps almost never causes any problems with money with my friends. I use both apps and I love them. Anytime I go out to dinner anywhere or movies or anything, we usually have one person pay for everything if we are in a rush. Then immediately jot it down in split wise. Then either at the end of the night, or whenever I can, I send everyone that owes me money a Venmo based on the totals that I had in SplitWise. These two appss are a must have for every friend group who is tired of having to pay for one thing or another just because he or she is the only one with some cash. I know I’ve been through this problem multiple times, and having these available have definitely helped me out.  To hear more of my thoughts on various Social Media Apps please visit smcentiresocmemar.wordpress.com.

 

Gartner’s Hype Cycle

Venmo falls under the plateau of productivity. Gartner.com defines Plateau of Productivity as:

“Mainstream adoption starts to take off. Criteria for assessing provider viability are more clearly defined. The technology’s broad market applicability and relevance are clearly paying off.”

When Venmo was released in 2009, there were already payment options such as through email and SMS. Also there were options to transfer via bank accounts, and other apps and services that allowed peer to peer transfers. Because there were so many different yet similar services available, Venmo never fell under the Technology Trigger. Peak of inflated expectations is already eliminated because the app has been around for 7 years and it is still growing. The app gained major recognition in 2015 and still continues to grow rapidly. In 2016, Venmo is attempting to switch from Peer to Peer, to Peer to Merchant. Venmo wants users to be able to make a payment just on their phones to stores for retail and other stores.  In my opinion, Venmo debuted under the cycle of slope of enlightenment. This is when other companies also started coming out with P2P apps and implementing the technology.

Because this tech’s broad applicability are coming into light now, i would say it is in the Plateau of Productivity.

Competition: PayPal

Even though Paypal is the parent company of Venmo, it is still heavy competition for the newer app. The first thing that stands out in the Venmo vs Paypal comparison is that PayPal is worldwide and Venmo is only limited to the US and its territories. So if you have family overseas this is definitely the app for you. Paypal is available in over 200 markets and in 26 different currencies. The downside of paypal is that any debit/credit card transaction incurs a 2.9% charge plus an additional $.30. The sender gets to decide who pays the fee. So you can easily be stuck with the fee, even if you are the one that was owed the money.  With venmo, debit card transactions are free. In PayPal, as long as you are trasferring from your bank to your account or account to account, it is free. If you are trying to transfer funds from your bank to Paypal or visa versa, it takes 3-4 days, with venmo it is only 1 – 2 days. As mentioned earlier, PayPal has an edge on Venmo because of their accessibility around the globe. Also Paypal has a limit of 10,000.

Security for PayPal is up to par with Venmo. They are both compliant with Payment Card Industry Data Security Standard level I. These are the same security standards that credit card companies such as Visa, AmEx, and Mastercard adhere to. Keep in mind that no digital transactions are completely safe, but Venmo and PayPal are as safe as using your card in a store. PayPal goes one step further with their security by offering a two step sms authentication system. So if someone were to just try to grab your phone or hack into your venmo, the transaction will have to be approved via email or SMS. But with PayPal you have the option to send money anonymously, so no one will know if you were the one who sent money to your friend for watching twilight.

Venmo

The easiest way to pay your friends.

This week on the Social Media’s Must is Venmo. It is my personal favorite social media app. Let’s say you end up at a restaurant that doesn’t allow you to split checks, because “the register doesn’t allow it.” Now at this restaurant, James orders a beer and some wings for $15, Rachel orders steak and wine for $30, and Winston just gets a burger for $12. After you’re done eating the waitress comes to you and tells you that you cant split the check, unless you do it evenly 3 ways. Well now that isn’t fair to James or Winston, is it? Instead of paying the 15 and 12 that they owe, everyone now has to pay 19 dollars.

With Venmo, that isnt the case anymore. One person can put the whole check on his/her card, and the rest of the group can just send that person the money through the app. Once you connect a debit card/bank account or credit card, all you have to do is open the app, look up that person’s name, and just send them the amount of money you owe. Its as simple as that. Now if you use a credit card, there is a 3% fee that is charged (more on that here), but with a debit card or bank account, its free.

Not only is this app free and convenient, but it also takes the awkwardness out of having to ask people for YOUR money. Everyone has that friend who never pays you back unless you consistently ask for your money back. This usually leads to some discomfort depending on the setting that you ask the money for, and how much you ask. Once again, venmo will alleviate this problem for you. Just open up the app, search up that person, and send a request for the amount that you are owed. This action sends a push notification to the debtor, alerting them of the amount that is owed. When you are sending the request, it gives you an option to write in what the payment is for. Now if you have a friend that still refuses to pay you after you sent the request,  you might just need better friends! And there are plenty of apps that can help you do that.

Target Audience

Who is the user?

One of the most important questions for any type of business is “Who is your target audience?” With Venmo, its anyone with a smart phone or tablet. It can be James with an Ipod Touch, Rachel with a Galaxy Note 7, or Winston with an Amazon Kindle Fire. As long as you have a smartphone like device, and connection to the internet, you can send and receive money to anyone, no matter where they live.

I have personally used it to send money to my friends in New York, and also on a daily basis. For example, I recently went on a trip to Cancun. During that trip, I put majority of the expenses, including flights, on my credit card. By doing this not only did I gain alot of credit card miles, but also it saved us the time of having to explain to the employees how we want the activities or meals split. I just used an app called Split Wise to keep track of the charges, and once i got back to the states, I summed up the totals and had everyone venmo me. Once you receive the money, it just sits in your Venmo account. Now with this money I can either choose to move it to a bank (more about how it works here), which takes a few days, or I can leave it in the Venmo account and use these funds to make future payments to friends/family on venmo.

Venmo has been around since 2009. In 2012, BrainTree acquired the app for $26.2 million, then in 2013, PayPal acquired BrainTree for $800 million. Up until October 2015, merchants were not allowed to accept venmo as a payment method. Now Venmo is working to expand their audience from peer-to-peer to peer-to-merchant. Right now there are only a few deals in place with certain merchants, but slowly they are looking into expanding to retailers all around the country. This will only help accelerate venmo’s growth. In the first quarter of 2016, venmo moved $3.2 billion, with an average transaction size of $2. This equates to roughly 1.6 million transactions. Venmo has built up a huge customer base, and it is only going to get larger.

 

User Interface

How it Works

As I mentioned in my other post, Venmo is extremely convenient. Once you open the app you are exactly 3 steps away from completing a transaction. The app is well designed and does not at all seem cluttered. On the home page of the app you will see a section for Me, Friends and Public. Under each of these sections are transactions executed by the different parties. Under Me, it displays transactions executed by me and the amount. Under Friends, it displays all transactions performed by people in your friends list. And under public, it displays all transactions of venmo users that do not have their setting on private. Even though you can see all the transactions and the comments made, only the parties involved can see the amount of the transaction. For example, if Rachel owes Winston money, she can send him 10 dollars, and under the “whats it for” section she put food. Now James, a friend of Rachel and Winston, can see that Rachel sent Winston money for food, but he will not be able to see how much money was sent. Users also have the option to comment on a friends transaction.

After the app is open, and you want to see how much your venmo balance is, all you need to do is hit the menu button. Once the menu pops up, the first thing you will see is your username and profile picture. Right under that is your Venmo Balance. To the right of that is your option to transfer to the bank. If you chose to tranfer your balance to the bank, it takes one business day for the funds to appear in your account. In order to pay with funds that are available in venmo, you have to have atleast the amount that is owed. Referring back to Rachel, if she only had $9.99 in her venmo balance, she would either have to use a credit card on debit card to pay. Now if she uses a credit card it is a 3% processing fee, but if a bank account or debit card is used its free. So after Rachel executes the transaction, $10 dollars will be taken from her card/bank, instead of venmo since there is not enough balance. A wireframe for Venmo is included above. For more information on how the app works, or their business model please refer to venmo.com.

Competition: SquareCash

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SquareCash is another digital wallet app that is peer to peer. Like Venmo, it is available in all 50 states and requires a data/wifi connection to operate. Squarecash is also free to download, but has different fees than Venmo. With Venmo you are able to link debit/credit cards and bank accounts. With squarecash, linking bank accounts is not an option. One major way I believe that Venmo beats SquareCash is because SquareCash does not allow you to have a balance within the app. All money is constantly being moved in and out of your cards. This can be costly especially if you are using credit cards, which have a 3% fee. Another downfall for SquareCash is that it has limitations on how much money can be sent and received. You are not allowed to send more than $250 a week, or receive more than $1,000 in 30 days.

One of the areas where i believe SquareCash beats Venmo is the fact that you can pay users that do not have an app through a website. The money goes directly to the linked card since a bank account can not be connected.

Security for SquareCash is up to par with Venmo. They are both compliant with Payment Card Industry Data Security Standard level I. These are the same security standards that credit card companies such as Visa, AmEx, and Mastercard adhere to. Keep in mind that no digital transactions are completely safe, but Venmo and SquareCash are as safe as using your card in a store. Venmo goes one step further with their security by offering a two step sms authentication system. So if someone were to just try to grab your phone or hack into your venmo, the transaction will have to be approved via email or SMS. But with SquareCash you have the option to send money anonymously, so no one will know if you were the one who sent money to your friend for watching twilight.