Difference between revisions of "Venmo"

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==History==
 
==History==
Venmo was founded by Andrew Kortina and Iqram Magdon-Ismail. The two met at the <span class="plainlinks">[https://en.wikipedia.org/wiki/University_of_Pennsylvania University of Pennsylvania]</span> in 2001 when they were randomly assigned as freshman year roommates. Throughout their senior year and for a few years following their graduation, the two founders began working on various projects, eventually launching Venmo in August of 2009. Their original idea was to launch a music startup through which people could send a text to a band and then receive an [MP3] via email.  The idea for sending payments over technology supposedly came during a night where Magdon-Ismail forgot his wallet and owed Kortina money. The original design idea was for users to send and receive payments via text message, but eventually morphed into the in-app payment method that Venmo uses today. <ref>[http://www.businessinsider.com/venmo-origin-story-facts-andrew-kortina-2014-6 13 Fascinating Things We Learned About Payments Company Venmo]</ref>
+
Venmo was founded by Andrew Kortina and Iqram Magdon-Ismail. The two met at the <span class="plainlinks">[https://en.wikipedia.org/wiki/University_of_Pennsylvania University of Pennsylvania]</span> in 2001 when they were randomly assigned as freshman year roommates. Throughout their senior year and for a few years following their graduation, the two founders began working on various projects, eventually launching Venmo in August 2009. Their original idea was to launch a music startup through which people could send a text to a band and then receive an [MP3] via email.  The idea for sending payments over technology supposedly came during a night where Magdon-Ismail forgot his wallet and owed Kortina money. The original design idea was for users to send and receive payments via text message but eventually morphed into the in-app payment method that Venmo uses today. <ref>[http://www.businessinsider.com/venmo-origin-story-facts-andrew-kortina-2014-6 13 Fascinating Things We Learned About Payments Company Venmo]</ref>
  
 
Venmo was first bought by <span class="plainlinks">[https://en.wikipedia.org/wiki/Braintree_(company) Braintree]</span> in 2012 for $26.2 million.<ref>[http://www.bloomberg.com/bw/articles/2014-11-20/mobile-payment-startup-venmo-is-killing-cash Cash is for Losers]</ref> In 2013, one of Venmo's former competitors, [[PayPal]], purchased Braintree and all of its subsidiaries in an all-cash deal of $800 million.<ref>[http://techcrunch.com/2013/09/26/paypal-acquires-payments-gateway-braintree-for-800m-in-cash/ PayPal Acquires Braintree]</ref> By the second quarter of 2015, PayPal's company earnings indicated that a total of $1.6 billion was being transacted through Venmo.<ref>[http://thenextweb.com/apps/2015/07/16/people-sent-1-6b-over-venmo-in-q2-2015-more-than-double-this-time-last-year/#gref People Sent $1.6 Billion Over Venmo]</ref> By the end of 2017, more than 2 million retailers accept payments through Venmo.<ref>[https://www.reuters.com/article/us-paypal-hldg-venmo/paypal-rolls-out-venmo-payments-to-its-u-s-retailers-idUSKBN1CM1GH PayPal rolls out Venmo payments to its U.S. retailers]</ref>
 
Venmo was first bought by <span class="plainlinks">[https://en.wikipedia.org/wiki/Braintree_(company) Braintree]</span> in 2012 for $26.2 million.<ref>[http://www.bloomberg.com/bw/articles/2014-11-20/mobile-payment-startup-venmo-is-killing-cash Cash is for Losers]</ref> In 2013, one of Venmo's former competitors, [[PayPal]], purchased Braintree and all of its subsidiaries in an all-cash deal of $800 million.<ref>[http://techcrunch.com/2013/09/26/paypal-acquires-payments-gateway-braintree-for-800m-in-cash/ PayPal Acquires Braintree]</ref> By the second quarter of 2015, PayPal's company earnings indicated that a total of $1.6 billion was being transacted through Venmo.<ref>[http://thenextweb.com/apps/2015/07/16/people-sent-1-6b-over-venmo-in-q2-2015-more-than-double-this-time-last-year/#gref People Sent $1.6 Billion Over Venmo]</ref> By the end of 2017, more than 2 million retailers accept payments through Venmo.<ref>[https://www.reuters.com/article/us-paypal-hldg-venmo/paypal-rolls-out-venmo-payments-to-its-u-s-retailers-idUSKBN1CM1GH PayPal rolls out Venmo payments to its U.S. retailers]</ref>
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Users first set up their accounts on the application using either an email address or a [[Facebook]] account. There are three main methods for making payments on the application.
 
Users first set up their accounts on the application using either an email address or a [[Facebook]] account. There are three main methods for making payments on the application.
 
[[File:transaction.PNG|right|250px|thumb|Venmo's "New Transaction" page]]
 
[[File:transaction.PNG|right|250px|thumb|Venmo's "New Transaction" page]]
These three options include transferring money from an existing Venmo balance, using a credit or debit card, or sending money directly from a US bank account. A user's Venmo account balance accumulates when other users send them money through the app. Money in the existing balance can used to pay others or can be transferred back to the user's linked bank account. The credit and debit card option is available for users' connecting their Venmo accounts with a credit account. Venmo supports most major debit cards, but incurs a 3% fee for credit cards and some debit cards issued by smaller banks.<ref>[https://venmo.com/about/fees/ Venmo About Fees]</ref>Receiving money is always free. A user can also set up their Venmo account by connecting it to their US bank account, from which it is possible to directly transfer funds back and forth between the bank account and the application.
+
These three options include transferring money from an existing Venmo balance, using a credit or debit card, or sending money directly from a US bank account. A user's Venmo account balance accumulates when other users send them money through the app. Money in the existing balance can use to pay others or can be transferred back to the user's linked bank account. The credit and debit card option is available for users' connecting their Venmo accounts with a credit account. Venmo supports most major debit cards but incurs a 3% fee for credit cards and some debit cards issued by smaller banks.<ref>[https://venmo.com/about/fees/ Venmo About Fees]</ref>Receiving money is always free. A user can also set up their Venmo account by connecting it to their US bank account, from which it is possible to directly transfer funds back and forth between the bank account and the application.
  
 
===Transactions===
 
===Transactions===
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     * Personal
 
     * Personal
  
The global news feed shows every request or payment that is made on Venmo in the order of their occurrence. The friends news feed shows the user transactions that occur between the user's friends making a post or others. This difference is distinguished with a symbol on the right side of each post, with a symbol of friends for the user's friends and the globe for others. Each post shows between whom the transaction was made, a photo of the sender, the comment and the time it occurred. It does not state the amount being transferred. The user is also given the option to like or comment on the post. Often times users like each other's post to show that they are aware they received the transfer. The personal news feed is specific to each user and shows their transactions that have occurred over time. The major difference with this timeline is that is shows the transaction amount which is green when money is received and red when a payment is made. It also shows the user when a transfer has been made to their bank.
+
The global news feed shows every request or payment that is made on Venmo in the order of their occurrence. The friend's news feed shows the user transactions that occur between the user's friends making a post or others. This difference is distinguished by a symbol on the right side of each post, with a symbol of friends for the user's friends and the globe for others. Each post shows between whom the transaction was made, a photo of the sender, the comment and the time it occurred. It does not state the amount being transferred. The user is also given the option to like or comment on the post. Often times users like each other's post to show that they are aware they received the transfer. The personal news feed is specific to each user and shows their transactions that have occurred over time. The major difference with this timeline is that shows the transaction amount which is green when money is received and red when a payment is made. It also shows the user when a transfer has been made to their bank.
  
 
==Business Model==
 
==Business Model==
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===Security===
 
===Security===
Although PayPal, Venmo's parent company has <span class="plainlinks">[https://en.wikipedia.org/wiki/Multi-factor_authentication two-factor authentication]</span> for every transaction and password reset, Venmo does not. <ref>[http://www.theverge.com/2015/2/27/8120983/venmo-security-problem-hacking-theft Venmo Security and Hacking Threat]</ref> Implications of this lack of authentication means that anyone with access to the application on another smartphone could potentially transfer large sums of money through Venmo in an instant without the user being able to do anything about it. In July of 2011, Venmo released an iPhone application update that added a passcode lock feature enabling users to lock their Venmo app with a four-digit PIN or <span class="plainlinks">[https://en.wikipedia.org/wiki/Touch_ID Touch ID]</span> (the Touch ID function is only available for <span class="plainlinks">[https://en.wikipedia.org/wiki/IPhone_6 iPhone 6]</span> users).<ref>[http://blog.venmo.com/hf2t3h4x98p5e13z82pl8j66ngcmry/iphone-update-released?rq=email%20settings iPhone Update Released]</ref>  If the user chooses to create a PIN for their account, they will be asked for their PIN or Touch ID every time they log in or open the app.<ref>[https://help.venmo.com/customer/portal/articles/1353616-can-i-add-a-pin-to-my-account Add a Pin]</ref> This added security measure serves to provide a little more security for Venmo users. Venmo limits users to $300 transfers per week, or up to $2,900 with identity verification. Although Venmo requires these transfer limits, there have been instances in which users managed to successfully transfer more than the $300 limit without identity verification. This kind of loophole can be dangerous especially if one user were to access another user's Venmo account to send large sums of money. The application's convenience is why so many users are not too worried about anything bad happening to them, but Venmo has been working harder to ensure that users don't need to sacrifice security for convenience. In dealing with sensitive information like bank account details, it should be even more crucial to the company to ensure that their users can expect a secure experience. <ref>[http://www.cnet.com/how-to/square-vs-venmo-vs-google-wallet-vs-paypal/%20Five%20Ways%20to%20Get%20People%20To%20Pay%20You%20Back Cash-free Pay Options]</ref>   
+
Although PayPal, Venmo's parent company has <span class="plainlinks">[https://en.wikipedia.org/wiki/Multi-factor_authentication two-factor authentication]</span> for every transaction and password reset, Venmo does not. <ref>[http://www.theverge.com/2015/2/27/8120983/venmo-security-problem-hacking-theft Venmo Security and Hacking Threat]</ref> Implications of this lack of authentication means that anyone with access to the application on another smartphone could potentially transfer large sums of money through Venmo in an instant without the user being able to do anything about it. In July 2011, Venmo released an iPhone application update that added a passcode lock feature enabling users to lock their Venmo app with a four-digit PIN or <span class="plainlinks">[https://en.wikipedia.org/wiki/Touch_ID Touch ID]</span> (the Touch ID function is only available for <span class="plainlinks">[https://en.wikipedia.org/wiki/IPhone_6 iPhone 6]</span> users).<ref>[http://blog.venmo.com/hf2t3h4x98p5e13z82pl8j66ngcmry/iphone-update-released?rq=email%20settings iPhone Update Released]</ref>  If the user chooses to create a PIN for their account, they will be asked for their PIN or Touch ID every time they log in or open the app.<ref>[https://help.venmo.com/customer/portal/articles/1353616-can-i-add-a-pin-to-my-account Add a Pin]</ref> This added security measure serves to provide a little more security for Venmo users. Venmo limits users to $300 transfers per week or up to $2,900 with identity verification. Although Venmo requires these transfer limits, there have been instances in which users managed to successfully transfer more than the $300 limit without identity verification. This kind of loophole can be dangerous especially if one user were to access another user's Venmo account to send large sums of money. The application's convenience is why so many users are not too worried about anything bad happening to them, but Venmo has been working harder to ensure that users don't need to sacrifice security for convenience. In dealing with sensitive information like bank account details, it should be even more crucial to the company to ensure that their users can expect a secure experience. <ref>[http://www.cnet.com/how-to/square-vs-venmo-vs-google-wallet-vs-paypal/%20Five%20Ways%20to%20Get%20People%20To%20Pay%20You%20Back Cash-free Pay Options]</ref>   
  
 
====Security Breaches====
 
====Security Breaches====
There have been a few security breaches reported through Venmo's platform. One victim of these security breaches was Bryant Trinh, a senior at <span class="plainlinks">[https://en.wikipedia.org/wiki/California_State_University,_Long_Beach California State University, Long Beach]</span>. The 21-year-old was robbed of three thousand dollars, however was only alerted of the scam by his <span class="plainlinks">[https://en.wikipedia.org/wiki/Chase_Bank Chase bank]</span> account rather than by the application. Trinh claimed that he received no notifications of another user logging into his account, and furthermore received no notice of any transactions taking place.<ref>[http://nextshark.com/venmo-hacked/ College Student Hacked for $3,000 Serves as Warning of Venmo’s Security Issues]</ref> Since the event, Venmo has updated their policy, as now they send emails to alert you of when a transaction has been completed. Another victim of hacking was professional poker player Moshin Charania. Charania's account was hacked for more than two thousand dollars. While Charania was later reimbursed for his loss by Venmo, the issue of account safety was still brought into question by Venmo users, most of whom voiced their concern for the platform's security over various social media accounts.<ref>[http://nextshark.com/venmo-hacked/ Venmo Hackings]</ref>
+
There have been a few security breaches reported through Venmo's platform. One victim of these security breaches was Bryant Trinh, a senior at <span class="plainlinks">[https://en.wikipedia.org/wiki/California_State_University,_Long_Beach California State University, Long Beach]</span>. The 21-year-old was robbed of $3,000; it was only alerted of the scam by his <span class="plainlinks">[https://en.wikipedia.org/wiki/Chase_Bank Chase bank]</span> account rather than by the application. Trinh claimed that he received no notifications of another user logging into his account, and furthermore received no notice of any transactions taking place.<ref>[http://nextshark.com/venmo-hacked/ College Student Hacked for $3,000 Serves as Warning of Venmo’s Security Issues]</ref> Since the event, Venmo has updated their policy, as now they send emails to alert you of when a transaction has been completed. Another victim of hacking was professional poker player Moshin Charania. Charania's account was hacked for more than two thousand dollars. While Charania was later reimbursed for his loss by Venmo, the issue of account safety was still brought into question by Venmo users, most of whom voiced their concern for the platform's security over various social media accounts.<ref>[http://nextshark.com/venmo-hacked/ Venmo Hackings]</ref>
  
 
In another case, Chris Grey, a 30-year-old web developer from New York City, received a notification from his Chase bank account informing him that his account had been charged the amount of $2,850. Grey checked his Venmo account to find that his password no longer allowed him to successfully log into his account. After resetting the password, Grey was able to see that a new address had been entered under his account information and transaction notifications had been disabled. The payment of $2,850 had been made to a user that Grey didn't know. Security concerns followed as Venmo again had failed to notify Grey of any of this suspicious activity on his account.<ref>[https://www.scu.edu/is/secure/blog-news-and-events/blog-posts/is-venmo-safe.html Is Venmo Safe?]</ref> Failure to notify users when account settings have been changed is one of the greatest security concerns, and has been the focus of many security breaches. In most cases, users are alerted of suspicious transactions through their linked bank accounts; however, as some users do not have automatic alerts for unusual or unexpected transactions, it would be in the users' best interests if Venmo's alert system were updated to reflect this need. After various hacking cases came to the company's attention, Venmo remedied the problem by implementing a feature through which users can set up email and text notifications to receive instant updates on when a payment is made through their account. Despite these improvements, the process for correcting a hacked or incorrect payment remains relatively slow.
 
In another case, Chris Grey, a 30-year-old web developer from New York City, received a notification from his Chase bank account informing him that his account had been charged the amount of $2,850. Grey checked his Venmo account to find that his password no longer allowed him to successfully log into his account. After resetting the password, Grey was able to see that a new address had been entered under his account information and transaction notifications had been disabled. The payment of $2,850 had been made to a user that Grey didn't know. Security concerns followed as Venmo again had failed to notify Grey of any of this suspicious activity on his account.<ref>[https://www.scu.edu/is/secure/blog-news-and-events/blog-posts/is-venmo-safe.html Is Venmo Safe?]</ref> Failure to notify users when account settings have been changed is one of the greatest security concerns, and has been the focus of many security breaches. In most cases, users are alerted of suspicious transactions through their linked bank accounts; however, as some users do not have automatic alerts for unusual or unexpected transactions, it would be in the users' best interests if Venmo's alert system were updated to reflect this need. After various hacking cases came to the company's attention, Venmo remedied the problem by implementing a feature through which users can set up email and text notifications to receive instant updates on when a payment is made through their account. Despite these improvements, the process for correcting a hacked or incorrect payment remains relatively slow.
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===Privacy===
 
===Privacy===
Because Venmo also has a social aspect associated to it, it deals with many of the same issues that social media sites deal with. Venmo has a “news feed” where users can see various transactions split into public transactions, friends’ transactions and personal transactions. Venmo has put a feature that allows a user to decide if a payment will be public, private or just for their friends. While this option is helpful for Venmo users to protect their privacy, some users do exploit the system by naming their payments inappropriately and using the public option to catch other people's attention for fun.<ref>[https://www.youtube.com/watch?v=QlJwgjN3lCY YouTube App Review]</ref> Venmo does not filter out most inappropriate content, which can be ethically damaging and scarring to innocent users, especially younger ones.
+
Because Venmo also has a social aspect associated with it, it deals with many of the same issues that social media sites deal with. Venmo has a “news feed” where users can see various transactions split into public transactions, friends’ transactions and personal transactions. Venmo has put a feature that allows a user to decide if a payment will be public, private or just for their friends. While this option is helpful for Venmo users to protect their privacy, some users do exploit the system by naming their payments inappropriately and using the public option to catch other people's attention for fun.<ref>[https://www.youtube.com/watch?v=QlJwgjN3lCY YouTube App Review]</ref> Venmo does not filter out most inappropriate content, which can be ethically damaging to innocent users, especially younger ones.
  
Venmo also allows users to link with other social media sites like Facebook, Twitter, and Foursquare which would then share their payments and posts on that social media. <ref>[http://www.pcworld.com/article/252261/venmo_aims_to_make_mobile_payments_social.html Venmo Aims to Make Mobile Payments Social]</ref> This social sharing will increase the privacy issues that Venmo has to deal with because it not only has to contend with the privacy of users on their own application, but now other social media sites are involved as well. Within a Venmo user's social network, the company provides three levels of sharing privacy (public, friends only, or private) that can be toggled on the fly. Being transparent and open about privacy and sharing is a key factor for Venmo as their business deals with finances, which is an intrinsically private matter for most people.
+
Venmo also allows users to link with other social media sites like Facebook, Twitter, and Foursquare which would then share their payments and posts on that social media. <ref>[http://www.pcworld.com/article/252261/venmo_aims_to_make_mobile_payments_social.html Venmo Aims to Make Mobile Payments Social]</ref> This social sharing will increase the privacy issues that Venmo has to deal with because it not only has to contend with the privacy of users on their own application but now other social media sites are involved as well. Within a Venmo user's social network, the company provides three levels of sharing privacy (public, friends only, or private) that can be toggled on the fly. Being transparent and open about privacy and sharing is a key factor for Venmo as their business deals with finances, which is an intrinsically private matter for most people.
  
 
[[File:vicemo.jpg|right|250px|thumb|What a Venmo newsfeed might look like.]]
 
[[File:vicemo.jpg|right|250px|thumb|What a Venmo newsfeed might look like.]]

Revision as of 14:38, 17 April 2018

"Venmo"
VenmoHeader.png
VenmoScreenshot.jpg
"Screenshot of the Venmo application" text
Type Mobile Payment Application
Launch Date 2009
Status Active
Product Line Mobile Payment Application
Music Sharing Application
Platform iOS
Android
Web
Website www.venmo.com
V
enmo
is a mobile payment application available on devices with Android or iOS operating systems where users can instantly send money to or receive money from other Venmo users. Users are able to put money into a Venmo account or link their bank account or credit/debit card to the app. Venmo has revolutionized the practice of transferring money by allowing its users to do so through their mobile devices quickly.[1] Initially, Venmo only worked for peer-to-peer transfers, emphasizing the social networking aspect of the platform. However, since 2017, select merchants accepted Venmo as a mode of payment. Users can also view information about transactions between their friends in the “News Feed” feature of the app. Because Venmo requires the sharing of personal data with the app to make transactions possible, there are a variety of ethical issues associated with the service. Some of these issues include the lack of two-factor authentication, the risks associated with security breaches, and the company’s attempt to make finances, which are generally viewed as private information, acceptable for social sharing.


History

Venmo was founded by Andrew Kortina and Iqram Magdon-Ismail. The two met at the University of Pennsylvania in 2001 when they were randomly assigned as freshman year roommates. Throughout their senior year and for a few years following their graduation, the two founders began working on various projects, eventually launching Venmo in August 2009. Their original idea was to launch a music startup through which people could send a text to a band and then receive an [MP3] via email. The idea for sending payments over technology supposedly came during a night where Magdon-Ismail forgot his wallet and owed Kortina money. The original design idea was for users to send and receive payments via text message but eventually morphed into the in-app payment method that Venmo uses today. [2]

Venmo was first bought by Braintree in 2012 for $26.2 million.[3] In 2013, one of Venmo's former competitors, PayPal, purchased Braintree and all of its subsidiaries in an all-cash deal of $800 million.[4] By the second quarter of 2015, PayPal's company earnings indicated that a total of $1.6 billion was being transacted through Venmo.[5] By the end of 2017, more than 2 million retailers accept payments through Venmo.[6]

Service

Account Set Up

Users first set up their accounts on the application using either an email address or a Facebook account. There are three main methods for making payments on the application.

Venmo's "New Transaction" page

These three options include transferring money from an existing Venmo balance, using a credit or debit card, or sending money directly from a US bank account. A user's Venmo account balance accumulates when other users send them money through the app. Money in the existing balance can use to pay others or can be transferred back to the user's linked bank account. The credit and debit card option is available for users' connecting their Venmo accounts with a credit account. Venmo supports most major debit cards but incurs a 3% fee for credit cards and some debit cards issued by smaller banks.[7]Receiving money is always free. A user can also set up their Venmo account by connecting it to their US bank account, from which it is possible to directly transfer funds back and forth between the bank account and the application.

Transactions

After verifying their linked bank accounts, users can go about sending and receiving money on Venmo using the pay options that they selected during account setup. There are a few ways for which various Venmo transaction take place. First, a user can click the new payment button in the top right hand corner that takes them to the "New Transaction" page. Users can search the name of the user that they want to pay or request money from. After selecting someone to pay or request from, the user must enter a dollar amount accompanied by a comment that describes what the payment is for.[8] The user then selects either the "Pay" or "Request" option and confirm the transaction before sending the payment. The user on the receiving end is informed with an in-app notification in addition to an email or text message. Another way to make a transaction is to visit another user's profile directly. After navigating to the receiver's profile, the user can press the blue "Pay" or "Request" button, which goes to the "New Transaction" page with the same process as before. Venmo connects to the contacts in the user's phone to find people with which they may want to connect on the app. A user's contacts will appear in their Venmo address book which allows users to search for someone by their username, phone number or email.[9]

Once a user has a balance in their Venmo account, they have the option to transfer it to their bank. This only works if the user's Venmo account is connected to either their checking or savings account. To transfer the balance, the user must click the hamburger navigation button in the top right corner and click "Transfer to Bank". This pulls up the "Transfer to Bank" page where the user can choose how much they want to transfer, which bank account they want to transfer it to, and then hit the "Transfer Now" button. The transfer process takes one business day, which is stated below the "Transfer Now" button and Venmo notifies the user when that takes place.

News Feed

Venmo has a news feed feature for its users. There are three types of news feeds:

Buttons of different News Feeds
   * Global
   * Friends
   * Personal

The global news feed shows every request or payment that is made on Venmo in the order of their occurrence. The friend's news feed shows the user transactions that occur between the user's friends making a post or others. This difference is distinguished by a symbol on the right side of each post, with a symbol of friends for the user's friends and the globe for others. Each post shows between whom the transaction was made, a photo of the sender, the comment and the time it occurred. It does not state the amount being transferred. The user is also given the option to like or comment on the post. Often times users like each other's post to show that they are aware they received the transfer. The personal news feed is specific to each user and shows their transactions that have occurred over time. The major difference with this timeline is that shows the transaction amount which is green when money is received and red when a payment is made. It also shows the user when a transfer has been made to their bank.

Business Model

While Venmo is not a revenue-generating entity of PayPal, the child company still extends the reach of PayPal's user base by a significant amount. As of early 2017, Venmo was only responsible for around five percent of PayPal’s total payment volume[10], but its mobile capabilities are becoming far more popular than PayPal's original application and website. The social nature of Venmo's platform has allowed it to take off among younger audiences in a way that the PayPal application did not manage to do. While Venmo itself is a transaction fee-free platform for payments made from user bank accounts or existing Venmo balances, payments made by debit and credit cards do include a three percent transaction fee[11]. Venmo continues to be a strong competitor against similar mobile payment methods like ApplePay, Google Wallet, and various other mobile payment options available through social media platforms (Facebook offers a payment option through its messenger service, Twitter offers Square Cash through its app, and Snapchat recently released SnapCash as a method of in-app payment)[12]. In coming years, Venmo is looking to expand its reach in various contexts, most prominently by means of in-store payment options that will shift the tide further away from traditional in-store payment methods.

Ethical Implications

Personal information and financial information is protected by Venmo's security systems and data encryption. Financial information is protected on secure servers.[13] Because Venmo is a mobile application, its security goes beyond just the application. Phone security remains an issue because it is the main point of access for the application. There has been debate about how secure Venmo really is. Unlike other mobile applications, Venmo experiences another level of security due to the fact that it deals with bank account details in addition to a lot of other confidential and sensitive information. Venmo does not have a phone line to deal directly with customer issues regarding stolen funds or other security concerns[14], which means that customer in need of urgent help may not receive immediate attention because Venmo relies on an email system that is known for being slow to respond.[15] The most prominent ethical problem being addressed by the popular press and various users of mobile payment methods is the problem of informed consent.[16] Overall, upon signing up for a Venmo account, the biggest breach of ethics is that users are not made explicitly aware of the risks associated with connecting their bank account and credit card information to the platform. The issue of confidentiality is another major ethical concern that arises specifically with Venmo. Users should be afforded a certain level of privacy when dealing with any kind of financial information, especially on web or mobile-based platforms due to the increased likelihood of hacking and general security breaching. Venmo's platform is highly social, one of its affordances being the inclusion of the global news feed, in which all transactions are published regardless of any one user's interest in maintaining a more private existence on the application. Usernames are easily searchable and can be accessed even by those who are not connected with any particular user, which in some cases allows for increased convenience but also means a sacrifice of privacy.

Security

Although PayPal, Venmo's parent company has two-factor authentication for every transaction and password reset, Venmo does not. [17] Implications of this lack of authentication means that anyone with access to the application on another smartphone could potentially transfer large sums of money through Venmo in an instant without the user being able to do anything about it. In July 2011, Venmo released an iPhone application update that added a passcode lock feature enabling users to lock their Venmo app with a four-digit PIN or Touch ID (the Touch ID function is only available for iPhone 6 users).[18] If the user chooses to create a PIN for their account, they will be asked for their PIN or Touch ID every time they log in or open the app.[19] This added security measure serves to provide a little more security for Venmo users. Venmo limits users to $300 transfers per week or up to $2,900 with identity verification. Although Venmo requires these transfer limits, there have been instances in which users managed to successfully transfer more than the $300 limit without identity verification. This kind of loophole can be dangerous especially if one user were to access another user's Venmo account to send large sums of money. The application's convenience is why so many users are not too worried about anything bad happening to them, but Venmo has been working harder to ensure that users don't need to sacrifice security for convenience. In dealing with sensitive information like bank account details, it should be even more crucial to the company to ensure that their users can expect a secure experience. [20]

Security Breaches

There have been a few security breaches reported through Venmo's platform. One victim of these security breaches was Bryant Trinh, a senior at California State University, Long Beach. The 21-year-old was robbed of $3,000; it was only alerted of the scam by his Chase bank account rather than by the application. Trinh claimed that he received no notifications of another user logging into his account, and furthermore received no notice of any transactions taking place.[21] Since the event, Venmo has updated their policy, as now they send emails to alert you of when a transaction has been completed. Another victim of hacking was professional poker player Moshin Charania. Charania's account was hacked for more than two thousand dollars. While Charania was later reimbursed for his loss by Venmo, the issue of account safety was still brought into question by Venmo users, most of whom voiced their concern for the platform's security over various social media accounts.[22]

In another case, Chris Grey, a 30-year-old web developer from New York City, received a notification from his Chase bank account informing him that his account had been charged the amount of $2,850. Grey checked his Venmo account to find that his password no longer allowed him to successfully log into his account. After resetting the password, Grey was able to see that a new address had been entered under his account information and transaction notifications had been disabled. The payment of $2,850 had been made to a user that Grey didn't know. Security concerns followed as Venmo again had failed to notify Grey of any of this suspicious activity on his account.[23] Failure to notify users when account settings have been changed is one of the greatest security concerns, and has been the focus of many security breaches. In most cases, users are alerted of suspicious transactions through their linked bank accounts; however, as some users do not have automatic alerts for unusual or unexpected transactions, it would be in the users' best interests if Venmo's alert system were updated to reflect this need. After various hacking cases came to the company's attention, Venmo remedied the problem by implementing a feature through which users can set up email and text notifications to receive instant updates on when a payment is made through their account. Despite these improvements, the process for correcting a hacked or incorrect payment remains relatively slow.

An inappropriate Venmo user's posts.

Privacy

Because Venmo also has a social aspect associated with it, it deals with many of the same issues that social media sites deal with. Venmo has a “news feed” where users can see various transactions split into public transactions, friends’ transactions and personal transactions. Venmo has put a feature that allows a user to decide if a payment will be public, private or just for their friends. While this option is helpful for Venmo users to protect their privacy, some users do exploit the system by naming their payments inappropriately and using the public option to catch other people's attention for fun.[24] Venmo does not filter out most inappropriate content, which can be ethically damaging to innocent users, especially younger ones.

Venmo also allows users to link with other social media sites like Facebook, Twitter, and Foursquare which would then share their payments and posts on that social media. [25] This social sharing will increase the privacy issues that Venmo has to deal with because it not only has to contend with the privacy of users on their own application but now other social media sites are involved as well. Within a Venmo user's social network, the company provides three levels of sharing privacy (public, friends only, or private) that can be toggled on the fly. Being transparent and open about privacy and sharing is a key factor for Venmo as their business deals with finances, which is an intrinsically private matter for most people.

What a Venmo newsfeed might look like.

See Also

References

  1. Venmo: About the Product
  2. 13 Fascinating Things We Learned About Payments Company Venmo
  3. Cash is for Losers
  4. PayPal Acquires Braintree
  5. People Sent $1.6 Billion Over Venmo
  6. PayPal rolls out Venmo payments to its U.S. retailers
  7. Venmo About Fees
  8. Venmo App Review
  9. YouTube App Review
  10. Venmo's monetization will be worth watching
  11. How Safe Is Venmo and Why Is It Free?
  12. Venmo: Its Business Model and Competition
  13. Venmo About Security
  14. Venmo Security
  15. Venmo Security Issues
  16. Ethics of Disclosure to Clients Who Pay With Plastic or Online Transfers
  17. Venmo Security and Hacking Threat
  18. iPhone Update Released
  19. Add a Pin
  20. Cash-free Pay Options
  21. College Student Hacked for $3,000 Serves as Warning of Venmo’s Security Issues
  22. Venmo Hackings
  23. Is Venmo Safe?
  24. YouTube App Review
  25. Venmo Aims to Make Mobile Payments Social