As fintech companies struggle towards the top of the payments pile, unlikely winners emerge that prove at least one thing – the world of technology is extremely fragile and fickle.
It also proves that technology and fintech companies that do not completely understand culture are likely to fall by the wayside.
The phenomenon that is Venmo is a case in point. Venmo, owned by PayPal, is a runaway success in the US. The application processed $4 billion in person-to-person payments in the second quarter of 2016, up by 141% year over year (you can read about it on LendEDU, here, and download the report). It is so popular that it has become a verb. It has even broken down some cultural taboos, such as asking for money for the beers you bought your friend three days ago. “Just Venmo me” is the saying of the day. And people use it to buy almost anything, from pizza, to food, from cocaine to strippers.
Yet outside the US, in the UK for instance, if someone said “Venmo me” you would not have a clue what they meant (if you didn’t read illustrative and informative articles on the subject). You might think they were being rude.
The success of Venmo begs the question: why?
The answer seems to be that it is appeals to young, tech savvy people. And what appeals to them is that it is free (if you link it to your bank account and debit card) and it uses emojis. Two things that young people love, and presumably that – and some clever marketing – made it cool.
The rest of the payments world is a mess. There are so many different ways to pay that there cannot be a clear winner. With Apple Pay, Samsung Pay, Android Pay, Who-Knows-What Pay, etc, the payments puzzle is impossible to fathom. Meanwhile, the big credit cards are in the game (Mastercard is now trying to get to the top via APIs, a clear admission of defeat, while actually the sane move), and the merchants are trying to deliver payments cards linked to loyalty schemes.
And now the Chinese are getting into the global payments game with Alipay.
The success of Venmo is all the more astonishing as a result of all that competition.
And presumably – with year on year growth of 141% – no one really foresaw that success.
The digital world is still young, fragile and unpredictable. And this does pose the question: what comes next? Is there, say, a Facebook Slayer out there?
Time, and not very much of it, will tell.