On Venmo and Payments

When was the last time you were so enthused about a product you actually wanted to pay your friends to get on it with you? Venmo is that magical service for me. It's a fantastic product (consider me a brand ambassador if you will, I tell everyone about it) but over the last few months I have become intimately aware at how hard it must be for them to acquire and onboard new users. Let me backtrack a bit.

Note: Reader beware. This was supposed to be a full-fledged blog post but after skimming it I didn't think it was terribly interesting or thought provoking so I just posted this unedited draft as a bit.

Almost a year ago I read an article on Hacker News about how easy Venmo makes it to split payments amongst friends. For whatever reason I had enough motivation to sign up for it when I had no friends on Venmo, not to mention going through the lengthy process of adding my bank and card info (having to look up ACH info is the biggest PITA).

Venmo isn't the only company in this space. Clover is another — similar to Venmo but no payment sharing (a 'feature' of Venmo which I don't really use anyways) and Clover is focused on speed of payment (not just for person to person payments; they're doing some merchant stuff too). But I got started on Venmo first and they are clearly in "user acquisition mode" so there are currently no transaction fees.

Getting friends on Venmo
Trying to get friends on Venmo..

Why I Use Venmo

I don't want to make this whole post about Venmo — more about the difficulty in onboarding users to payment services that require bank account info and open a discussion around that.. but Venmo is an example of a great product providing value that externally appears to be struggling with adoption.

My Venmo usage often falls into one of two categories: a) frequent small transactions with Akshay like splitting the power bill or charging him for Chipotle (much easier/faster to just have one person pay and then Venmo later.. and I can reap more AmEx points) and b) splitting charges with larger groups of people at events like cash-only concerts (who bought drinks, etc) or splitting hotel/car rental expenses related to a Tahoe snowboarding trip amongst more than a few people.

The utility is stellar and it's an example of a product that has succeeded in changing my behavior and that of some friends. Whenever a lunch check comes, one person will get it and the others will get their phone out and Venmo the purchaser.

It was a recent (my first trip and my first time snowboarding) Tahoe trip that made me think about writing this post. It didn't matter how hard Akshay or I tried, we just could not convince two of our tripmates to join Venmo. That's just the most recent example. There have been many friends that I could not persuade. Reasons ranged from "but this is just a one time thing I won't use it with you again" to "I have to setup my payment info? That sounds like a lot of work." It was usually the latter.

I don't have an answer

It doesn't matter how good your product is when your users still have to endure the inconvenience of adding their payment info. What do you think can be done? Will banks or other ecommerce companies you already trust with your payment information let you auth your favorite payment startups in the future? Something with a better UX than Paypal.