Whaaat?

In just seven years, Venmo has grown from a fledgling peer-to-peer app for transferring money into a booming company with millions of users and an annual payments volume topping $19 billion.

But what’s even more impressive, says Jay Parekh, its Director/Business Development, is that Venmo – which was purchased by PayPal as part of an $800 million acquisition of payments-processing firm Braintree in 2014 – has managed to build a beloved brand around a normally unbeloved process.

Tell me more!

The aim, Parekh explained, was to distill the magic of Venmo’s peer-to-peer app into a retail tool, so that merchants could reap the benefits. And the insights from that exploration may ultimately have implications that go far beyond the payments sector.

“We discovered a lot of useful lessons that guided the development of this new product,” said Parekh. “But we also realized that a lot of the lessons are relevant for other mobile companies that want to build a really rich experience and be as beloved a product as Venmo.”

One of those lessons, Parekh asserted, is that it is essential to understand and address customer pain points. For Venmo, that meant reducing the awkwardness of exchanging money.

A second lesson that emerged from Venmo’s process of self-reflection is that products and services have a context, and shifting that context – by adding emojis and notes to money transfers, for example – can change the consumer experience.

A third lesson from Venmo’s journey is that brands can become part of people’s conversations by creating experiences, and not just transactions. For example, Parekh pointed out that when Venmo users exchanged money for pizza, they rarely mentioned the pizza-delivery companies in their feed on the app. But when it came to ridesharing or short-term rentals, brands like Uber, Lyft and Airbnb received a ton of mentions.

My 2 cents:

A lot of people wonder what Venmo’s secret sauce is, especially when considering its juxtaposition with PayPal, the parent/acquirer, and it turns out, most speculation was pretty close and classic: eliminating a pain point and improving engagement by adding a social feature.

The key to Venmo’s unique success lies in the third lesson: making it so that a brand can transcend a service and become part of the users daily journey. I theorize that the unsung hero of this phenomenon was Venmo’s (intentional?) targeting of the college crowd. When a service meets its ideal crowd, the odds of bridging the service to verb gap (ie. ordering a rideshare vs. ubering, paying for something vs. venmoing) is much more likely.

Drawing a parallel between Venmo and another crowd favorite Snapchat, I look forward to seeing how and if Venmo will be able to effectively drive growth and innovation as pressure fro profitability mounts.

Full article

Advertisements