Venmo Services: Simplifying Digital Payments and Money Transfers

 

1. Introduction

Venmo is a service that allows users to pay friends, family, or anyone who has a Venmo account. The service is especially convenient and useful because it is in digital form – available as a mobile app that allows seamless means of sending and receiving money. Founded in 2009, Venmo has over the years changed to now provide instant bank transfers and credit card withdrawal features. Also, it lets users maintain a paperless record of all their transactions while enjoying the longest bank transfer window of just 30 minutes. With its ability to deliver fast and free digital payments without the need to share personal payment information, Venmo is fast becoming the most preferred way to send money or make payments with friends. This paper seeks to examine the aims of the Venmo service and the ways that it has helped to promote the culture of digital payments. Furthermore, it will investigate how different users can benefit from using the payment service.

1.1. Overview of Venmo Services

Venmo is a service that facilitates the transfer of money between users, almost always (but not only) for free. Usually, such transfers remain in the Venmo system as what Venmo calls a “Venmo balance” which can be cashed out through a user’s bank account, debit card or prepaid card or used for future payments, but later on, we will discuss the fact that money can also be sent straight to a user’s bank accounts via the Automated Clearing House system, which also has no fee. Venmo can be used with mobile devices or through the web, and the service is only available to users in the United States. Venmo can hook up to many bank accounts and credit or debit cards. By linking up their financial accounts, users can easily complete payments through the app. For example, choosing a bank account to complete a transfer will simply require the user to enter their bank account’s password for a quick identity check. On the other hand, when a user decides to utilize a credit or debit card for a transfer, Venmo may place the charge amount on the user’s card and ask the user to verify the card with a code sent to the user’s card or phone number. While focused on explaining how Venmo and its balance system is designed to work, comments could illustrate competing service policies or how users use and feel about their Venmo balances. Also, remember at this stage to keep explanations high-level and not to get into the detailed steps of finding things in the app – that can come later in the chapter.

1.2. Benefits of Using Venmo

Using Venmo has a number of distinct benefits over other payment apps. It’s fast and is completely free, even if you pay using a credit or debit card (it does usually have to pay for instant transfers to your bank account, though). Plus, when you make a purchase, and Venmo offers you a refund after that, the money goes right back to your Venmo account. This makes it easy to do things like order a pizza with a friend, split the cost and when your friend pays you back, the money simply goes back to your Venmo account. Also, I think we can all relate to moments where we forget to bring money to give to someone or where we know our friend doesn’t have money on them. Venmo makes it easy for someone to transfer money to you if you ever find yourself in this situation. The app also makes it easy to manage payments by keeping a clear account of all the transfers you’ve made and received. The app of the moment seems to be Cash, executed by Square, and I tried it before after a friend recommended it to me. However, I didn’t enjoy it as the interface was not as intuitive as those found on both Venmo and PayPal and no one I know is actually using Cash, making it less useful. PayPal is a much more established platform and can be used pretty much everywhere, but I find it less attractive than Venmo due to the lengthy time it takes for money to be transferred. This is despite the fact that PayPal does not transfer the money instantly into your account since it automatically goes straight to your chosen bank account. On the other hand, Venmo provides the option of either an instant transfer (for a small 1% fee, with a minimum fee of $0.25) or a 1-3 days transfer to a bank account for no cost.

1.3. How Venmo Works

One may wonder, “How does Venmo work?” The understanding of how Venmo ultimately works begins with the need for it to have key instruments to facilitate the transactions users make. Firstly, there is a need for an internet-enabled device. Furthermore, there must be a mechanism through which the recipient of the money and the amount the sender is meant to pay are known. This is typically achieved in Venmo using either an email address or a phone number linked to the recipient. Also required is an active and functioning account with Venmo. In this account, the user needs to have linked either a credit or debit card so as to be able to meet the request made by a friend. Alternatively, there is an allowance to link the user’s bank account to Venmo. In this case, the user is able to receive a larger sum of money. In addition, Venmo needs to collect information so as to comply with federal and state laws. This allows Venmo to provide services to users and send them information and offers. Venmo also works with other companies in the PayPal group in using the user’s information. In this case, for users who have signed up for Venmo, the list of “important” transactions, as highlighted previously, is shared with the PayPal group for the purpose of enhancing the security of the transactions and communications. Such transmissions, both of user content and other transactions, could be made to servers in the US and other countries. However, knowledge that one’s information may potentially be transmitted is important in understanding and accepting the terms and conditions of using Venmo.

2. Features of Venmo

Friends and family members who use Venmo can transfer funds to one another, making their lives much easier. All you need is the recipient’s phone number, email address, or Venmo username. By linking a bank account to your profile, you can transfer money to and from your bank at no extra cost. There is also an option to keep a balance within the app, and you can use this to make payments before needing to replenish it again. When you receive money through Venmo, you can either keep it in your balance for use in a future payment, or you can transfer the funds to your linked bank account. This will take one to three business days to complete. Venmo also allows users to request payments from the people who owe them money. This creates a record of the request within the app, which is helpful if you need to pursue a debt through other means. When someone sends you payment through Venmo, you will receive a notification that you have been paid, and the payment will appear in your Venmo account. As an additional feature, users can complete a significant amount of transactions in a day – from the app’s guide, this can be up to $4,999.99 per week. Also, if you need to move more than you are allowed to, linking a verified bank account or debit card can help. For those who need to transact bigger amounts, payments that you make from a linked bank account are not limited. On the other hand, if you pay from your Venmo balance or a debit card, there is a weekly rolling limit of $299.99. By using the app, not only can you rely on constant funds from contacts, but you can make payments with ease.

2.1. Sending and Receiving Money

When it comes to mobile apps for sending and receiving money, you have a variety of options, but Venmo has really started to make a name for itself – enough so that most people use the term “Venmo” to generically refer to the act of sending money via a mobile app. One of the things that makes Venmo so user-friendly is the simple process for sending money. If you owe someone money, you simply tap the “$” button at the bottom of the app and search for the person you want to pay. If you’re receiving money, the app allows you to transfer that money to your bank account simply and at no cost if you can wait a day or two for the transfer to process. Instant transfers are also possible if you’re willing to pay for the service. Venmo also offers the ability to make and receive payments via message, which adds a helpful level of engagement. This move to person-to-person payments via message is in line with a new approach by many tech companies, such as Apple, which recently announced Apple Pay Cash and has similarly emphasized the social aspect of payments. However, unlike some person-to-person payment services, which are typically only available through messaging apps such as Messenger or Snapchat, Venmo is designed specifically for mobile money transfers. With simple payment features, the option to receive payments via message, and a sleek, user-friendly design, it’s no wonder that Venmo is quickly becoming a leader in the mobile payment space.

2.2. Splitting Bills with Friends

Next time you go out for dinner, you can just send your friend the money through Venmo right when you get your bill. Just tap the blue “$” button in your in-app conversation, select who owes what, then send your request to your friends. You can choose to split the whole bill evenly among your friends, or you can calculate exactly how much each person owes based on what they ordered. Venmo even helps you split bills with friends who don’t have Venmo! When you send a payment request, your friends will get a reminder to sign up and install Venmo. After they pay you with the app, their payment will show up in your Venmo account. Splitting bills with multiple friends is also successful, appease each person needs to complete their needs. By choosing to split a bill among a few people, you can easily select different amounts for each person according to what they need to pay, giving others the flexibility of choosing the split plan that works best for each person! Also, once the bill is paid, you get to see who has paid their part, and who looks like they might need a little extra reminder with payment requests. Splitting bills with Venmo makes managing expenses amongst friends as easy as completing transactions!

2.3. Venmo Card and Cash Back Rewards

Venmo also offers a physical debit card that can be used for payments and ATM withdrawals. The card is linked directly to your Venmo account and it can be used anywhere Mastercard is accepted. The Venmo card is especially helpful if you have a Venmo balance that you’d like to withdraw. When you use the card, you have the option to use your Venmo balance first and then have the remaining balance of your purchase withdrawn from your linked bank account. Cash back rewards are a common feature of credit cards, and now Venmo offers cash back rewards for payments made with the Venmo card at select merchants. When you use the Venmo card for purchases at featured merchants, you’ll earn cash back rewards that are automatically added to your Venmo account. The best part of the cash back reward feature is that the money you earn rewards, as well as the money in your Venmo account, can be transferred to your bank account or used for payments with no charge. This differs from other digital payment apps, like PayPal, that offer similar cash back rewards but require you to transfer money to a PayPal cash account and could charge transaction fees when you use the rewards.

2.4. Venmo’s Social Feed

At the bottom of the app’s home screen is the social feed which displays the transactions of friends and other Venmo users if their privacy settings are public. In the feed, each transaction is displayed with its associated comment, the date and time of the transaction and depending on the transaction’s privacy settings, either the recipient or the sender. Users have the ability to like and comment on their friend’s transactions. Also, the user has the option to make the transaction and the associated comments private or public. Benefits of the social feed: i. Transparency. By default, all transactions are public and displayed in the social feed. This level of transparency makes it easier for the user and the recipients to have a record of who made a transaction, in what amount, and for what purpose. ii. Casual and friendly experience. The comments feature in each of the transactions helps to inspire interaction and engages users in a more casual and friendly money transfer experience. Also, users can like their friend’s transactions. iii. Keeps users connected. For users who have not met for some time, or for those that want to regularly keep in touch with each other, the activity on the social feed can be a way of staying connected. By reviewing a friend’s or a family member’s transactions and comments on the social feed, the user is able to have an insight of that person’s life. This is far much easier as compared to the traditional and rather static approach of simply sending and receiving money between the users.

3. Security and Privacy

I learned from first-hand experience that people put their trust in a company like Venmo. The company is serious about security and employs what’s known as “bank-grade 256-bit SSL encryption,” which safeguards your personal and financial information. SSL stands for secure socket layer, and it is the same technology that all major banks and industry leaders use—a curious fact I may mention. Venmo’s encryption at rest is “extremely powerful” because all data is “scrambled” using an algorithm that translates information into a code. In turn, the company ensures that it’s keeping up with the latest advanced security and privacy technologies. For instance, there’s an entire team that’s dedicated to security, a team that’s made up of infrastructure experts who help set up and configure production environments as well as engineers who work on both the app’s front- and back-ends. Venmo prides itself in delivering what’s called “defense in depth,” which is a strategy wherein a series of defensive mechanisms are layered in order to protect valuable data and information. With layers placed throughout the network’s every function in security and privacy, this methodology ensures that even if one layer fails or is circumvented, other mechanisms continue to provide effective protection. Last but not least, the team has a continuous and ongoing mission to conduct regular security tests and maintain close watch over the app, paying special attention to the responses and every function of security and privacy. This strategy is called file integrity monitoring—it works by placing software throughout the server that periodically takes a snapshot or impression of the software and sends the tech team notifications if anything changes.

3.1. Encryption and Data Protection

Venmo utilizes encryption to shore up the security of its clients’ financial information. This includes utilizing Secure Socket Layer (SSL) for all exchanges made on venmo.com and in the portable application. Borrowers with the Venmo Mastercard are likewise given chip-card innovation and clients can quickly freeze their cards if there should arise an occurrence of robbery or misfortune, through the portable application. The information that Venmo assembles from its clients is put away and anchored in servers situated in the United States. Client access to servers is given to qualified staff just and this entrance is controlled through the utilization of novel client accreditations. For extra client insurance, Venmo offers and prescribes the pointing of client agents that the organization admits all clients to the site. As an observer to the endeavors Venmo has made to confirm and enable its client to base, to section 3.1. of the Versatility and security approach of the organization makes a promise to show up the purchaser with respect to the organization’s security rehearses and also indicating of the viable intends to decree of client get to. User’readiness to consent to certainty and telesign’s Security structure likewise demonstrates that Venmo is totally focused on enhancing the security of the client’s existence. These aides in encouraging foundations that broaden advances through Venmo and urge clients to continue utilizing the administrations. With a guarantee to fulfilling necessities of the client budgetary party and section 3.2 of the approach tending to the needs of Guarantors, the technique guarantees that loan specialists working with credit candidates through Venmo will have the capacity to satisfy the Lawful commitment of confirming up information through the usage of the organization’s propelled confirmation stages. The arrangement additionally addresses the condition of security in how Physician supported medicates and Medicare information is opened up to Security and Assurance authorities under HHS.

3.2. Two-Factor Authentication

By using 2FA, Venmo can specify in its contracts that such a measure is being utilised. This is important both in helping to ensure customer confidence and also to provide legally for the protection of data. By properly protecting customer data with measures such as 2FA, services such as Venmo can help to give additional reassurance to customers that their data is in safe hands and build trust and confidence in the market.

Also, as well as serving to protect consumer data from potential cyber-attacks, the use of 2FA also serves to protect Venmo from potential fraudulent losses and can help to ensure that Venmo complies with relevant legal and industry requirements, force cyber security requirements and the GDPR. 2FA requirements sit alongside other contractual commitments that Venmo can and does make with its customers – for example, that it will take appropriate technical and organisational measures against unauthorised or unlawful processing of personal data and against accidental loss, destruction or damage to data.

Venmo uses 2FA as an added layer of protection on top of usernames and passwords. If you choose to turn on 2FA in your security settings, you will be required to enter a code sent to your mobile device whenever you want to add a new email address or change important account settings. The result is that even if a third party was able to monitor and intercept your traffic between your computer and Venmo, they would be unable to make important changes to your account.

Two-factor authentication is a way of providing an additional level of security to a digital process. It works by requiring two different forms of identification: something you know, e.g. a password; and something you have, e.g. a mobile phone. This means that getting unauthorised access to a device, an online account or a system is much harder as mere possession of a password is not enough to pass the authentication check.

It is vitally important to ensure that the consumer data held by companies is kept safe and secure from potential cyber threats and cyber-attacks. The use of two-factor authentication, or 2FA, has been recognised by the UK government as an important security measure in helping to protect consumer data and in ensuring that we are meeting the requirements of the GDPR.

3.3. Privacy Settings and Control

Venmo app users can opt in or out of sharing individual transactions or hide the friends list in the app. The app updates continuously with new settings that give users even more control over what is shared and as well as what is private. Users can access these security settings by clicking on the menu from the app, and then selecting the “privacy” option. The users can customize their privacy settings to fit their wants. For example, a user may want to keep the amount of the transaction private but share the “emoji” that is provided for a particular transaction. By doing this, users can control who sees the information of each transaction, every time they send or request money. When it comes to payments through the Venmo app, users can select multiple levels of desired security. I can change these choices using the “payment security” option in the privacy settings. For users who need the most protection, particularly those who use their Venmo account for business and personal use, the “trust” option is the most secure. By choosing the “trust” option, users restrict other users’ ability to find them through the Venmo social connection. This limits the ability of Venmo to transfer or share personal information through the app. These privacy settings are incredibly important such that they are located in the main menu of the app and there’s a standalone section just for the privacy settings. These privacy settings put the power of control into the user’s hands and puts Venmo’s commitment to protecting the personal information and data of the users on full display. This is a great help for the users because with the control, they are able to decide how to keep their private financial information safe. Every detail on the screen. With the additional security protection of the new features added to the app, such as the biometric touch ID, users’ privacy will be highly secured. Advertising governs all privacy policies and the privacy setting options for the Venmo app. The app’s privacy policy outlines the types of personal information that the app collects from the users, as well as the ways in which Venmo may use or disclose the personal information. Venmo shares users’ personal information within the PayPal services network, including service providers that help create accounts, process transactions and maintain the account. Also, the policy states that Venmo may share personal information for everyday business purposes – such as to process transactions, respond to legal investigations, or report to credit bureaus. By selecting specific privacy settings in the app, users can tailor privacy controls to their desire and limit the sharing of personal information. Every individual setting can be customized and predetermined privacy settings can be reset back to default at any given time. This level of privacy control allows users to be assured that their private financial information stays safe and secure from prying eyes. Users may receive a notice of updated privacy policy from time to time. For the users who disagree with the updated policy, they should close their account to terminate the agreement with Venmo and it will not affect the previous acts of the users based on the prior agreements.

4. Venmo Business and Merchant Services

Venmo Business and Merchant Services were only introduced in 2018 when mobile payments have been gaining more popularity and the digital payment trend has been increasing at a fast pace. Many businesses are now leaning towards the modern era by accepting digital payment methods, which are more convenient for businesses and customers. With Venmo, businesses can accept payments made by their customers not only through debit or credit cards but also through the Venmo app. Customized payment solutions are also provided for businesses that integrate Venmo into their application, platform, or website. This helps businesses not only connect with millions of Venmo users but also showcase their products and services in a more personalized modern digital solution. As the customer base grows, Venmo’s growth depends on its ability to expand its relationships with businesses to provide value to both users and merchants on its platform. Businesses that accept Venmo can take advantage of Venmo’s social media-based features, which provide free marketing and brand exposure on Venmo’s social feed. Not only that, as the number of transactions processed through Venmo increases, the cost of payment processing will decrease for businesses, as provided in the terms agreed upon in Venmo’s commercial user agreement. Merchant services provided by Venmo are operated by PayPal, another leading digital payment provider, through its subsidiary, PayPal, Inc. Overall, Venmo merchant services are offered according to the agreement that binds merchants and PayPal. Business owners who want to integrate Venmo into their application, platform, or website are advised to check the official website for further details and request more information regarding the merchant services offered by Venmo.

4.1. Accepting Venmo Payments

If your business has a goal of capturing the growing mobile payment market, setting up Venmo should be a priority. Accepting payments from customers via Venmo requires that you have official verification as the business owner or employee. Venmo operates under the PayPal structure, allowing it to provide services like processing payments, rights to dispute charges and the use of customer balances in the purchase of goods and services. Venmo offers an Integration Library that provides the Professional or Custom Services. In the developer section of the Venmo website, an authorized signatory with authority to bind the company or business has to create accounts for the business and add approved users that provided with the development information. After successful creation of Venmo developer account, the merchant should open developer account at the PayPal Developer site and create REST API Application, and generate client ID and secret. By obtaining the approval from Venmo, you can integrate Venmo customer mobile payment functionality. Venmo offers three main options for the customers: Standard, a low fee option which is either free transaction or 1.9% + $0.10 for every transaction; In-App option for the digital goods transactions with 5% + $0.10; and in the Custom Offering. Each API offers a quick way to set up a website to accept the payments online. Venmo should be set up correctly for financial records to be updated. A bank account with routing number and an active debit card has to be linked in the payment methods library in the company’s Venmo business account. Therefore, setting up Venmo for accepting payments for the professional or custom services it’s the best option for the business growth.

4.2. Venmo for Business Owners

Venmo offers a variety of features and tools to help business owners effectively manage their finances, process customer payments, and conduct business in an increasingly digital world. First and foremost, creating a separate business profile within a pre-existing Venmo business account allows you to keep personal and work finances and payment activities separate. This will make accounting and taxes easier to manage while helping to organize transactions on a day-to-day basis. Furthermore, business owners can apply for a Venmo business debit card to tap into a variety of rewards and actively earn any cash back off of qualifying purchases. This freedom offers a significant step in giving business owners more control over their money. When it comes to sales and transactions above standard in-person or email orders, Venmo offers a number of reliable and secure payment links and QR code generators. Each transaction has a unique code that securely facilitates transactions, giving customer and merchant alike peace of mind with the knowledge that their finances are well looked after. Finally, Venmo offers a number of extra business features targeted specifically for e-commerce or online business platforms. By taking advantage of the Venmo Developer API program as well as resource and help centers, easy steps are provided to seamlessly integrate custom service payments, monitor and track monthly operational performances, and even offer expanded shopping solutions. By staying on top of the industry like this, business owners can truly cater to their customers much more effectively when processing online payments and fulfilling orders. Far from just a simple money sending and receiving service, the convenience and security features available through Venmo make it an excellent tool and asset for modern businesses.

4.3. Integrating Venmo into E-commerce Platforms

When it comes to the best payment gateway for eCommerce, the exciting thing about Venmo is its versatility. A seamless integration between Venmo and your eCommerce solution means providing a payment experience your customers will truly love. An integration allows the customer to remain on your platform when entering payment information—creating a more unified experience for them. No need for developers to spend hours coding from scratch. As a developer, you’ve got more important things to work on. You can prevent fraud and reduce friction for Venmo customers. By using server-side calls for payment, you can protect against malicious attacks and also reduce the number of steps a customer may undergo in the payment process. Money is in the customer’s balance to spend. By the nature of how money is transferred to merchants via Venmo, once the payment is successful, the money is instantly available in their Venmo account and can be sent to friends, used to pay merchants, or transferred to their bank account. This differs from other payment mechanisms such as credit card direct payment gateways where there can be a delay before the issuer releases the funds. By providing a quick, secure and easy mobile payment method, integrating Venmo into your payment gateway strategy can help to drive conversions and provide an improved level of service for merchants and customers alike. As an added bonus, quite often there are a number of deals and discounts that merchants can participate in if they offer a ‘Pay with Venmo’ service. This revolves around the concept of enticing the customer with rewards and offers, known as the ‘social spending’ element of Venmo.