By Frédéric Olivier (intern at B-Hive) and Trendwolves.
Millennials love Venmo, because it has turned financial transactions into social media. Other generations wonder: why on earth would anyone care what their friends are paying each other? And what's next?
The above is an extract from a forum hosted by Quartz Media. Can you guess which one of these two contributors is the Millennial (and which one isn’t)? Quartz called it the Venmo line, signifying that everyone below 30 years old gets Venmo, and the ones over 30 don’t.
Venmo is an app by Paypal, which lets people send small amounts of money back-and-forth. The payments are not instant, but the app has become hugely popular with Millennials because every transaction appears on the app’s social feed, without dollar-amount, for all friends and connections to see. You can label a transaction as ‘private’, but only 5 % of transactions is kept private, according to Venmo.
According to the company itself, Venmo’s social feed is the key to success. ‘The app turns financial transactions into an experience’, as Josh Criscoe, spokesman of Venmo, explains. ‘The average user checks Venmo two to three times a week just to see what his or her friends are up to.’
‘The average user checks Venmo two to three times a week just to see what his or her friends are up to.’
Venmo is another example of how social media are redefining and shaping all aspects of life. Albeit security (safe financial services) convenience (easy financial services) and speed (instant financial services) are very important to young consumers, connection with their peers is that even more.
Most Venmo users are in it for the fun. ‘Half the things on my feed are clearly not what they say the are. I see song lyrics, emoji’s and inside jokes’, as one user puts it. Others value the peer pressure that comes with knowing who already paid back for yesterday’s dinner (you didn’t!). In that sense, Venmo adds a layer of accountability.
So why aren’t there more financial apps out there that offer the same social services? Because the app might be successful with Millennials, it isn’t with the older generations. Zelle, a payment app developed by Bank of America and 19 other big banks, recently experimented with its own social transaction feed. But it fell flat with Zelle’s intended audience, says Zelle’s developer Lou Anne Alexander. ‘While appealing to some ages, it’s not really appealing to all.’ Not appealing is an understatement. Those over 30 years old tend to be very concerned about the app and what they feel as the loss of privacy. But most of all, older generations wonder: why? Why would I want to see which of my friends paid my other friends?
Why? Why would I want to see which of my friends paid my other friends?
The answer is: because youngsters look at their peers for almost everything. What to wear, what to say, what to think, what to do, what to buy and where to buy it, who to adore and who to despise. Financial transactions are part of buying, thinking, wearing, adoring and despising. Transactions are linked to almost all aspects of life, and they’re very revealing.
It means that Millennials are creating a habit of comparing finances with their peers, and might in the near future expect all their financial services to cater to this need. How much do I spend on food, compared to my peers? How much do I save, compared to my peers? And how can my bank/my app help me to control my budget? Can I challenge myself to spend less than my best friends this month? Data technology is making it all possible, if not today than in the near future. Question is who will provide the best app. And how much time older generations need to run for the hills.