In a world ruled by mobiles, only a hero had the power to integrate social media into boring activities like money transactions transforming them into a joyful experience. And that was Venmo. But is this the only secret of its success? We shall see what made Forbes to name this app “The crown jewel of all finance apps”.
As you can probably guess, the app that won students’ hearts was created by two college friends a few years after graduation. Andrew Kortina and Iqram Magdon – Ismail realized that almost all activities are going mobile. So, why not to create a service which allows people to send money for known persons in an easy way, just by using their devices? The app was launched in 2009 and was designed in such way that took the advantages of the information gathered after the payments for attracting its users. Three years later, in 2012 their startup was bought by Braintree for $26.2 million, as TechCrunch announced at that time. In 2014, PayPal acquired Braintree for the amazing sum of $800 million. After that not many users were aware about the fact that PayPal owns Venmo since the app is about sending payments after splitting the costs of a rent, a launch or a cab ride. We will analyze further how Venmo took the idea of sharing a little further than sending interesting content on a social network.
How Venmo Did It
Let’s see how a money transfer service can be fast and entertaining at the same time.
We should start with the obvious. Having the social feature, Venmo allows users to talk with their friends about the events that generated those transactions. Besides that, they can follow and observe what their contacts share about their payments and this is what attracts customers the most. Even if they don’t want to transfer money, users still open the app to see what people do. It is interesting for them to discover where their friends had dinner or where did they travel.
Word Of Mouth
Venmo is by nature a shareable app. Venmo creators knew that they needed an app for making their lives easier and they designed it in such a manner that everybody who use it to experience the same level of comfort in completing daily tasks. Word of mouth is the main growth engine in this case. If somebody uses Venmo for transferring money he recommends the other person that he should install the app for receiving the payment. And this is all it needs for adding a new user. No extra effort, but the condition is for the app to be efficient and simple to use.
When you talk with your friends it is easier to describe your thoughts with small images. Emojis make the discussion even more interesting and help users to prove their point. A bonus is the fact that the team behind the app adds new sets of emojis with every occasion like this recent update with some festive ones for the Fourth of July.
If you think about it for a second you would believe that the most popular emoji is the one that represents money, but the reality shows that pizza is the most used image among users. A more intuitive result described by the Infographic below shows that rent is the most expensive emoji.
We all know that Millennials use their mobile devices for all their daily activities and they prefer simple and fast services along with social sharing features. All these are offered by Venmo. So it is no wonder that the app had so impressive success among young people. Additionally, it removes the bad situations when two friends have to split a purchase that cost just a few dollars. Without having to deal with checks and cash the process is even quicker since they can select their friends by their name, phone number or email address. With a few taps users can transfer money and to share with their contacts where they went, what they did and with whom. The social aspect is very important for millennials so the app provides all the elements they need.
Even if PayPal is Venmo’s owner since 2014, only last year the giant company considered a strategy for monetizing the app. The process was carefully managed for not ruining users’ experience. Since the beginning, the app was offering free services for users with the exception of credit card payments which were done after charging a small fee. But PayPay considered the audience of Venmo as an opportunity for merchants. The service called Pay with Venmo started with Gametime, the ticket ordering platform and Munchery, the food delivery service but now it is available for any company. Their clients have the possibility to pay with Venmo inside other apps without extra costs. PayPal takes money only from merchants who gain popularity because of the social feature of the app, not from their customers. It was a smart decision for keeping users happy and increasing revenue in the same time.
Bonus Tip: Build a trend
Peer – to – peer transfer elements converted this app into a real phenomenon. Everything was so impressive that its name became a verb, especially for young people who often say “I will Venmo you the money for that purchase” instead of “I will send you the money for that purchase using the Venmo app”. When you own an app it is not enough to gather a huge number of users, it is essential to enter into their lives and to provide a very useful tool for their needs. They will reward you with their recommendations for their friends and with other smart moves for making your app viral.
We discussed today Venmo, an app which brings together all the elements preferred by Millennials when it comes to converting an app into a must-have for their devices. Even the monetization strategy is one that doesn’t compromise user experience. Instead, it adds more value to the app for the sake of its customers. We recommend you to study the growth strategy of Venmo and to use those elements that are relevant for your app in order to achieve the wanted success.