The memo line in your checkbook is usually reserved for humdrum messages like, say, "monthly rent" or "phone bill." But as Venmo cofounders Andrew Kortina and Iqram Magdon-Ismail were designing their modern and mobile take on payment services, they realized it was not only an opportunity to make their app fun and unique—but also an opportunity to make it social.
When Kortina and Magdon-Ismail launched their app in 2009, they baked social into its core, a surprising feature in the personal finance category. The service, which lets users exchange money super simply via smartphone with no strings attached, evolved from the idea that payments aren't necessarily always intended to be private transfers of funds. "We found ourselves paying each other back with cash and checks, and we thought, 'This is silly because we use our phones to do everything else,'" Kortina recalls. "So we said, 'Let's go build a version of [a payments service] that feels more like the apps we're used to using with our friends, like Twitter and Facebook.'"
Since then, the startup has developed a unique community willing to share personal, often entertaining information tied to their payments—a social component that's helped set Venmo apart from the competition while goosing engagement on the platform.
It's interesting to think of Venmo as a social network, but the service is used to share payment data just like users might share news or photos on Twitter or Instagram. If you want to pay back a friend for, say, dinner or a night out, just pull up Venmo, select the right contact from your list of friends, plug in the dollar amount, and—voilà—you're good to go. But before completing the transaction, Venmo will ask what the payment is for. Maybe you write, "Drinks at Ace Bar," or perhaps, "Usual debauchery." By default, the annotations are public, visible to those involved in the transaction as well as your other friends on Venmo.
"It became this record of all the things that we were doing—the people we were hanging out with, the places we were going—and it started to look a lot like a news feed," Kortina says. "Many think payments are a private thing, but if you think about it, the things you spend money on with friends are: going to restaurants, concerts, ski trips, birthdays. These are the things you would actually talk about the next day over the water cooler at work, so it's natural people want to share."
The shared payment notes give insight into what your friends are up to; they're also often amusing to read. Of the most commonly shared words and phrases, there are the mundane, inevitable exceptions: "rent" or "utilities." But it's becoming increasingly common for friends to share notes that are intentionally trivial, hilarious, hyperbolic, or goofy, if not flat-out unrelated to the payment itself. We reached out to some colleagues to see how their networks were using the service socially; sample comments include payments for:
- "Excessive twerking"
- "Fantasy baseball loophole—I hate you"
- "Being bad at math"
- "Child support monthly installment"
- "The perfect Arnold Palmer"
- "Extra rides on the water slide"
And these are some of the more G-rated comments. Perhaps some of them are real—maybe one user really did pay a friend $10.70 for that "perfect Arnold Palmer." But in all likelihood, users are playing up the humor for their other friends on the network, or perhaps referencing a specific inside joke or memory related to the payment. (One of the most popular reasons for payment on Venmo is "[for] being awesome.") Regardless, the social aspect of Venmo makes the services feel more authentic and personal—terms rarely used to describe the payments space. It's partly why the startup was acquired by Braintree, which in turn was snapped up recently by PayPal for a cool $800 million.
"We definitely see that [stuff] happening," Kortina says. "We try not to be prescriptive in the ways we tell people to use it because we like the idea of creating a platform where people can be creative. I think that the misdirection or the joking around when paying for something—it's just people having fun. There are a lot of people who are very literal about what they're paying for, and there are also people who get creative. When my sister pays me for an electric bill, for example, she'll put emoji lightning bolts instead of 'for the utility bill' because it's just more fun."
Adds Kortina, with a laugh, "You wouldn't draw lightning bolts on a check when you're paying for something."
We've even seen some more extreme examples of how people are using the platform. (Please share your own experiences in the comments below.) In one instance, a colleague used the service to make tiny payments in jest in order to communicate a lighthearted message—that is, paying a friend a penny for "making me another sandwich #thankssss."
That's probably something you wouldn't see in your checkbook either.