How Venmo made splitting the bill fun

Does anybody want to Venmo me $10,000 for enduring the horrors of being the sleepiest girl alive and somehow having a career?

Anybody? No? Not even my gorgeous beautiful sexy daily readers?

Fine.

If you don’t know what Venmo is, it’s probably because you’re one of our New Zealand subscribers. And we have fk all here.

If you have heard of it and you’re from here, it’s because it’s become a cultural sensation. But how the hell did a fintech app make its way into popular culture?

Well, Venmo made payments fun.

Which is crazy to me. Every time I spend money, I literally watch another hair on my head turn grey. It’s also crazy because fintech is notoriously unfun.

Venmo managed to do the impossible with a clever insight and epic targeting, transforming the way engaged with money.

Like all good apps, it started as a pain point.

The company’s roots trace back to Andrew Kortina and Iqram Magdon-Ismail’s freshman year at the University of Pennsylvania. The pair collaborated on various coding projects. As they did so, they identified a pain point – splitting bills was a b*tch.

Repaying one another through physical check was cumbersome. So they realised there was a need for an easier, digital solution.

Launched in 2009, Venmo allowed users to send money via SMS.

In 2012, Braintree acquired Venmo. Then PayPal aquired them for $800 million. This was the catalyst for Venmo to evolve from a peer-to-peer payment platform into the social network of money it is today.

Their winning marketing strategy also helped.

Their strategy revolves around one insight--the demographic of Venmo users it targets (18 – 34 y/o) are often out and about with their friends. They also often split bills with these friends (because have you SEEN the state of the economy?).

This informed the idea that the friends you Venmo are the friends that you spend time with, as mentioned by Kasia Leyden, Senior Group Marketing Director at the Venmo and Braintree.

And this is how the company captures the referral loop, or word-of-mouth. When someone from the group covers a bill and says 'Just Venmo me,' it creates a sort of social pressure for everyone else to join the platform. Because who wants to be the only one flailing cash around or messing with clunky bank transfers? It’s almost like the brand shames non-users into joining.

Well played Venmo, well played.

But what truly sets Venmo apart from being a dull-ass fintech app is its feed.

Being dubbed the social network of money, its UI looks like a social media platform, displaying transactions among friends. This means you can actually observe your friends’ spending habits. Users share inside jokes, add emojis, and uhh, stalk their friends via financial voyeurism, I guess?

It’s reported that users often scroll through their Venmo feed to see what everyone else is doing. Which seamlessly blends financial management and social interaction. Who would have thought?

And it doesn’t limit its social potential to the app itself.

Because 83% of Venmo users are age 18-34, Venmo has built its audience across Instagram, Twitter and TikTok.

Instagram is Venmo’s largest social platform, with 159,000 followers. It also receives the highest paid ad spend, with a monthly budget of $407,000. Venmo focuses its advertising efforts here, often hosting giveaways, promotions and posting humourous content about spending habits.

Twitter is where Venmo interacts with its users, creating a two-way dialogue using retweets and commentary. Here, the brand encourages its users to share their repayment captions by surprising them with $25 as a reward. Venmo also often uses the polling function for further interaction. This organic strategy fosters engagement and brand positivity among users.

TikTok is mainly reserved for advertising. However, Venmo collaborates with a lot of influencers to increase awareness about their referral program. Users can get $25 for referring a friend, using the hashtag #venmopartner (which currently has 11m views).

So, what can we learn from Venmo?

• Creatively address pain points. Venmo's success started with addressing a common pain point--the inconvenience of splitting bills. It then turned this arduous financial task into a fun and social experience. If you get this right, you can turn your product into not only a utility, but a delightful and integrated part of your users’ lives.

• Leverage social dynamics. We humans are social creatures. That is no marketing secret. By turning payments into a social activity, adding a sprinkle of social pressure and a little bit of FOMO, Venmo were able to drive user acquisition. Create a situation where using your product is the norm and you will foster organic growth.

• Use multiple social platforms. This helps maintain engagement with your core demographic. Each platform can serve a specific purpose. Develop a strategy that tailors content to each platform’s strengths and audience behaviors.

And NOW that I’ve given you all that helpful information, I’m sure one of you will happily answer my request from the start. I take PayPal and direct transfer, too.

-Sophie, Writer