WASHINGTON — Cash might still be king — but more and more cash alternatives are crowding around that throne, cramping his style.
One is Venmo, an app that allows friends and other trusted acquaintances to send money and make purchases.
It’s similar to PayPal: A user connects the app to a bank account, debit card, credit card or prepaid card. But with Venmo, only credit card transactions carry a user fee (at 3 percent). Competitor PayPal charges 2.9 percent plus 30 cents for debit and credit card transactions.
Venmo also incorporates a strong social media element — unlike PayPal’s private transactions. It asks for comments on every transaction, and those comments (along with transaction amounts) are posted in a browsable news feed.
And as Venmo wins over more social circles, it can encourage nickel-and-diming pettiness within them, as illustrated in a recent New York Times story. For instance: You might be asked to chip in $30.18 for Saturday’s bar tab instead of just $30.
Whatever happened to casually calculated split tabs, paying a few extra cents so your friend wouldn’t need to break a $20 bill, paying the tip for everyone else, etc.? Is this to-the-penny transaction tool a bad thing?
No, said Tom Merritt, host of the Daily Tech News Show. Chatting with WTOP’s Dimitri Sotis, he pointed out how much of a pain splitting the bill can be — especially when you’re young and on a budget.
“At that time in my life, people didn’t usually spring for dinner,” he said. “We didn’t have enough money for that, so we all very dutifully tried to carve out which part of our check was ours.
“So I think Venmo has actually made that a lot easier, and for people who are using it who are generally in that demographic, it is a very beneficial thing.”
Even though using the app can come across to some as impersonal, Merritt said that users have found ways to give it a human touch in the transaction comments (with the use of emojis, for example).
“And obviously you can use Venmo to divide a bill precisely, but you don’t have to,” he added.
Such mobile payment tools are here to stay, he said, citing the growing prevalence of Android Pay and Apple Pay.
“I think the general impulse to want to treat your friends and family will still be able to happen,” Merritt said. “You can be racing someone to tap your phone on the bill instead of racing to throw down that credit card.”
