By Kelly Hodges
Two friends go out for lunch and one is short on cash so the other covers the bill. Three roommates share living expenses, one writes out the bills and the others reimburse him. Siblings go in together on a birthday present for their mom, one purchases the gift and tells the others what they owe. Do these scenarios sound familiar? Every day people cover expenses for their friends and relatives, and now technology is helping to make repayment easier.
A mobile app growing in popularity is Venmo, a peer-to peer payment system that allows friends to repay each other instantly. Venmo eliminates the hassle of writing out checks to pay back a friend or even having to remember that you owe someone money. Another advantage is that it allows you to “bill” a friend who owes you money, as a gentle reminder if they have forgotten to pay you back. The app is extremely user friendly and transactions are made by sending a message analogous to a text, with the amount paid or owed and a note about what the money is for.
Venmo also has an interesting social aspect to it as well, which sets it apart from similar peer-to-peer payment systems such as PayPal. With Venmo, your account can be linked to either Facebook or Twitter, so that settling up debts can be shared with your social network as well. For example, instead of just sending your sister-in-law the $60 you owe her for concert tickets you can let everyone know that the two of you had a rocking time at the show. The sharing aspect is optional, and you don’t need to be on social media to use the app.
Once you set up Venmo then a bank account and credit or debit card can be linked. Then the key is to get friends and family (people you frequently need to settle up with) to sign on as well. Again this is where the social media comes into play, because you can invite others to join through Facebook or Twitter. Once your friends are onboard you can make payments, receive payments, and request payments from others. There are no transaction fees either as long as you use your bank account or a debit card, but a 3% fee is charged for credit card transactions.
Another nifty feature is the “trust” status that can be assigned to certain people. For example, you could assign your roommate “trust” status and he would be able to automatically withdraw your half of the electric bill each month (just make sure you really trust him J).
This app caters to the younger, tech-obsessed, frequently-borrowing-money-from-each-other crowd, and seems to serve its purpose well. Peer-to-peer payment is gaining in popularity and becoming more mainstream, and Venmo is the best system I’ve seen to get the job done.
Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of her employer or any other person or entity.