App Makes Money Between Friends Issues Less Painful, More Social
Filed under: Technology, Personal Finance
We've all had awkward moments like these: settling up the group dinner check when a cashless friend promises to pay you back; attempting the frustrating financial acrobatics of going four-ways on a wedding gift; twisting through the diplomatic contortions of how to phrase an email to a friend who owes you money. There has to be a better way. Venmo, a social network that provides a seamless exchange of money through mobile devices, promotes itself as the 21st century solution. What? There's No App For That? Andrew Kortina and Iqram Magdon-Ismail, former University of Pennsylvania roommates, built Venmo to take the inconvenience, awkwardness and frustration out of dealing with money among friends. The idea for the app was born out of an almost-missed train. Back in 2009, Magdon-Ismail was coming up from Philly to visit Kortina in New York City, but in his rush to make the train, he forgot his wallet at home. Kortina loaned him money for the weekend, but they both wished they'd been able to exchange money by phone somehow. "He ended up writing me a check," Kortina said. "We thought, 'There must be something wrong if there's no app.'" But there wasn't an app, and among millennials perpetually attached to their phones, there was certainly a demand. Financial soothsayers are already predicting the demise of cash, credit cards and checks as mobile technology more effectively steps in to expedite the process of squaring up. Related Articles
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Users of Venmo love sharing these payment notes with friends, leaving comments, and browsing through payment histories to relive time spent with friends. Every payment tells a story of shared memories: birthday brunches, after-work drinks with colleagues and ballgames. "You wouldn't think that payments are social and things that people necessarily want to share," Kortina said. "But what we discovered is that the payments are actually a proxy -- [Venmo] lets you collect these fun things for your friends and lets you share that experience with your friends." In essence, Venmo collects your experiences like a scrapbook of your social life. Though how much the payment is for won't be shared, the notes can appear to your network. The app's also clutch for spur-of-the-moment spending situations. Say, if someone's getting married and a bunch of friends are out for the bachelor party, a friend who couldn't make it into town can send along $20 through Venmo and buy a round. Getting Your Money Without The Awkwardness We all have that friend who -- despite the best intentions -- continually leaves money we've spotted him at the bar unrepaid. It's not a big deal, initially -- $15 here, $30 there. But it can add up, and it feels awkward to bug a friend to fork over the moola. But with Venmo, along with a loan of money, you're also creating a note between the parties about exactly what's owed, and the social context in which the loan was made. Gallery: Apps to Make You Smarter With Money


"So when you are paying someone back, the experience is more focused on what you [were] doing rather than the amount of money," Kortina said. The app also sends automated reminders to the borrower, which takes the onus of being a nag off the app user and puts it on the software -- all in aid of easing future social interactions among friends.
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Source: http://www.dailyfinance.com/2012/05/08/venmo-makes-mobile-payments-friendlier-among-friends/