"I think Venmo is plotting to use their platform to eventually control all the money in the world,” wrote one anonymous respondent in an open feedback section of a survey I sent out about Venmo, a mobile app that allows users to pay other users with the tap of a screen. “I’m not quite sure how it’s gonna happen, but I just have this feeling.”
This respondent gave no elaboration on the sources of her Venmo conspiracy. But my informal survey wasn’t intended to invite rigorous responses, so much as to get a feel for how the 121 people who happened to see the link I posted to my Facebook page felt about Venmo. Other respondents indicated similar suspicions: as one put it, “[Venmo] is a little too easy.” Another called it “dumb but convenient.” Still another told me, “I want to know why you are asking these questions. Is there something I should be worried about Venmo?”
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Venmo has become a near-essential component of millennial culture nationwide. It has an estimated 7 million users, three quarters of whom, according to a 2017 survey by Verto Analytics, are under the age of 35. We know Venmo is significant (at least for the moment) because we have successfully “verbed” it. You probably don’t say, “Can you pay me for that coffee on Venmo?” You say, “Just Venmo me.”
When you sign up for Venmo, you create an account which you can then link to a funding source such as a bank account or credit card. Venmo syncs to your phone contacts to connect you with anyone else who has a Venmo, and can also be synced with your Facebook contacts. You can then electronically pay or request payment from other Venmo users (Venmo calls these person-to-person, or P2P, transactions). These transactions mostly consist of the repayment of small debts—a few dollars for a friend who bought you coffee, money for gas on the ride to the airport. However, if you verify your identity with Venmo, you can theoretically transfer up to $2,999 at a time.
When I first heard about Venmo, it sounded kind of suspicious to link my bank account to a third-party app. But after my attempts to buy used clothes from the “Free and for Sale” page resulted in needless haggling in cash with exasperated peers, I gave in. My fears regarding data privacy and bank theft were quickly replaced by an appreciation of Venmo’s convenience. That one friend who is definitely paying for their weed with the unpaid latte debts they owe you no longer has an excuse.
While 98 percent of survey respondents agreed or strongly agreed with the statement “Venmo is convenient,” Venmo goes beyond providing a convenient way to pay off debts. In fact, personal transactions aren’t even the first thing that pop up when you open Venmo. It’s actually your “social feed.”
The social feed consists of short blurbs in the form “Person X paid Person Y, z minutes ago,” accompanied by a comment describing what the transaction was for. You do not see how much money was involved. To many people’s distaste, the accompanying comment is mandatory, and since Venmo automatically suggests emoji correspondents to your words, the social feed is often filled with cartoon images of pizza and beer. You also have the option to “like” or comment on any transaction. And just like with Facebook, if you click on one of your friends’ names, you’re taken to their personal Venmo profile, where you can see their own transaction history.
There is nothing in Venmo’s terms of service that mentions the social feed—it’s implicit that you accept this part of the app. You can’t turn your social feed off, and the default setting is for all transactions to be made public, not just among your friends, but with the entire Venmoing world. And while you can make your own transactions private so that they don’t appear on others’ social feeds, not many people do—90 percent of Venmo transactions are public.
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I didn’t give Venmo’s social feed much thought until I got rid of all my other social media accounts for five months. Occasionally, I still found myself yearning for a mindless scroll through menial information that might give me a glimpse into the lives of people I hadn’t talked to in years. So I turned to Venmo. And in terms of fulfilling that social media obsession, I found Venmo surprisingly rich.
One survey respondent described Venmo as “the last frontier of uncensored social media.” Unlike Facebook and Instagram, Venmo uses no algorithm based on previous likes, comments, and views to determine what you see—it’s just a list of transactions in sequential order. And since you have to pay someone to post, Venmo is notably unburdened by unsolicited selfies and political posts. It turns out that transaction-based social media provides an ostensibly unfiltered representation of what people are actually doing and who they are interacting with (or maybe just who they’re getting drugs from).
Thus, Venmo has become somewhat sarcastically infamous for being the best social media to dig up intimate details on others. One survey respondent wrote that they had used Venmo to confirm “that certain couples were dating.” 29.35 percent of survey respondents had, at least once, used Venmo to search specifically for a person they were not making a transaction with, purely in order to view their personal feed in search of specific information. I call this “Venmo-stalking.” Several people told me they “stalk” their crushes on Venmo. Somewhat shamefully, I myself can confess to having “Venmo-stalked” multiple people.
Then there are examples of less conventional Venmo payments. 27.43 percent of survey respondents who had Venmo said they had used it to send charitable donations; 7.08 percent had used it for “sending money to members of oppressed communities” (for example, there was a recent movement within CC to Venmo students of color for the unpaid labor they do to oppose racism). Two people had even used the app for “trolling political enemies”—for example, after former White House Press Secretary Sean Spicer’s public Venmo account was unearthed last year, people requested him for stuff like “anxiety meds because your boss is a lunatic.” Of course, people also use Venmo just to joke around. One friend told me that a guy she had hooked up with the previous night Venmoed her (for gas money) the requested $5, plus an additional $0.69.
But behind its humorous gems and nascent political uses, the prevalence of profile-viewing and Venmo-stalking has a more self-absorbed implication. Specifically, it gives diligent, socially self-conscious users the opportunity to curate their public posts. Once start using something as a tool to glean an impression of other people, you become at least subconsciously aware that other people may be using that platform to form an impression of you.
Hence the pact I have made with my sister to “keep our Venmo game strong.” This means that all of our transactions must be labelled with clever, obscure captions, often references to something barely relevant to the transaction itself, or deliberately indecipherable inside jokes. If someone Venmos us for something straightforward and normal like “gas money,” they’ve disrupted our “game.” The implicit goal is to create the impression that whatever fun was behind this monetary transaction was so unique and special that no one else could possibly understand it—but they should all know about it, and feel jealous that they didn’t get to pay me three dollars for that life-changing mango smoothie.
To some degree, my obsession with my “Venmo game” is still just a joke. But I know that other Venmo users abide by these unspoken rules, too. Curating my Venmo profile lets me co-opt what seems to be a straightforward public record of P2P exchanges into yet another digital tool that advances my own social status. I didn’t plan for it to happen this way, and I’m sure other Venmo users didn’t either, but I still can’t bring myself to write “gas money” in the transaction feed. To do so would be to admit that all I was doing was driving, not having the time of my life.
And lest you think I’m a self-obsessed exception, my survey did support the conclusion that people care about Venmo as a social media. 35.92 percent of survey respondents agreed or strongly agreed with the statement “I am conscious of what appears on my Venmo feed, as I would be with other social media (i.e. Facebook, Instagram).” Though that’s not a majority, it’s still an indicator that many users are susceptible to Venmo’s ploy to integrate transactions into a social network. You may have never thought you cared what other people thought of the small debts you owed. But everything changes when these interactions become public. When the stakes involve social reputation, it’s easy to convince people to start caring.
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This brings us to the question of why Venmo even has a social feed in the first place. Venmo’s social feed has motives beyond merely capitalizing on millennials’ apparent desire to share every previously private part of their lives. The social feed is actually a keystone in Venmo’s plan to make money—that is, if it can facilitate a shift the way its users think about the privacy of commercial transactions.
Venmo is owned by PayPal, the online payment company worth approximately $13 billion. (eBay owned it for 13 years, but it is now an independent publicly-traded company.) During the 2016 election, liberals started movements to boycott PayPal, mostly because co-founder Peter Thiel donated $1.25 million to the Trump campaign. PayPal has also been the target of several class-action lawsuits against company practices that purportedly allow the company to freeze accounts at will, and is still accused of political bias because it has repeatedly blocked the accounts of human rights groups that support political prisoners in countries like Iran and Russia. But since people don’t seem to know that Venmo is owned by PayPal, Venmo seems to have escaped that public scrutiny unscathed, though it is very much under the jurisdiction of its parent company.
Until recently, Venmo generated almost no revenue for PayPal—although surplus funds from P2P transactions (what you see in Venmo as your “Venmo balance,”) are held collectively in Venmo bank accounts, the company neither trades those funds nor invests them for profit (although the terms of user agreement do waive your right to profits from invested funds).
In the fall of 2017, Venmo announced its intentions to introduce merchant transactions, opening its platform to more than 2 million businesses in the U.S. Essentially, the idea is that you can go to a participating merchant’s website or physical location (stores like Forever 21, Target, and Urban Outfitters are already on the list), pay with a tap instead of a card or cash, and easily split the bill amongst your friends. It’s easy to imagine Venmo becoming the primary, most convenient method of payment—a world in which cash and credit cards become obsolete.
Venmo then takes standard 2.9 percent cut of the merchant’s profit for every merchant transaction, in contrast to P2P exchanges, for which it charges no transaction fees. According to Venmo, even with that cut, businesses have an incentive to sign up for the service. Partially, it’s in the interest of publicity. Let’s say I, a hypothetical basic rich girl, buy a new pair of yoga pants online from Lululemon using Venmo (Lululemon does in fact allow Venmo payments). Both Lululemon and Venmo then encourage me to share this interaction on my social feed, perhaps with an enthusiastic comment related to the purchase, so that all of my friends can share in my excitement and become jealous that they themselves haven’t bought new yoga pants today.
At first glance, this business model might appear to bet on an unrealistic level of shameless consumerism. Venmo’s plans seem to depend on the assumption that consumers feel the need to flaunt their purchases of name-brand purchases to their friends. As of now, Venmo’s social media strategy seems oblivious to the mostly ironic way that college-aged Venmo users interact with the social feed. This disconnect is evident in Venmo’s pitch to potential business partners, which includes a hilariously fake Venmo post, “Bryan paid Clothing Co, gonna look fresh (100 emoji symbol),” followed by a comment thread between Bryan and his friend Steve, who asks what type and size of pants Bryan has acquired. One can hardly imagine millennials commenting on each other’s transaction posts in such a lame and straightforward way.
While Venmo seems to recognize that users won’t be as willing to share merchant transactions (unlike P2P transactions, merchant transactions aren’t currently public by default), Venmo’s sales pitch to businesses trusts that users will be enticed by the potential social “connections” of publicizing their purchases. Given the unlikely popularity of the P2P social feed, the idea that we might someday want our merchant transactions to be a primary feature of our social identities is not too far out of the question. A virtual public record of which brands we choose to buy might just be a natural extension of our eagerness to wear clothes that display a brand (the prevalence of Patagonia on campus comes to mind).
And top PayPal executives have voiced vague plans to further develop the social appeal of merchant transactions. PayPal Chief Operating Officer Bill Ready told Barron’s, “You’ll start to see us, over the coming months and quarters, continuing to expand places where you can use Venmo, and you’ll find social aspects will be ... what’s most attractive to our users.”
So although it’s in its early stages, Venmo’s business model appears promising. Between 2015 and 2017, as Venmo payments rose from 2 percent to 8 percent of PayPal’s total payment volume, PayPal’s stock value also rose (as did its revenue, growing a remarkable 17 percent). As PayPal CEO Dan Schulman told Fortune, the transition from peer-to-peer to merchant transactions is “how we monetized PayPal, and that’s exactly what we’re going to do with Venmo.” That is, merchants were willing to partner with PayPal even though the company took a cut, because it made the online shopping experience easy for the consumer and stress-free for the merchant, who didn’t have to create their own secure payment platform. The publicity benefits promised to businesses who partner with Venmo are just the cherry-on-top, a further incentive to sign on. But there’s an aspect of the social feed that may be even more lucrative than publicity.
With every transaction you post to the social feed, you create a public financial record. And companies are itching to get their hands on information about where consumers spend their money, so that they can correlate these transactions with other interests and past purchases, and better target their advertising. Richard Crone, who runs a payments-focused firm called Crone Consulting, told The Atlantic that, “The real value [in Venmo] is in the data, and the ability to render customized ads and offers, and generate a revenue stream from that.”
This seems relatively harmless, but if you’ve been following the news lately, Crone’s comment about the perceived “value of data” might strike a disconcerting cord. The exploitation of Facebook data assisted the Trump campaign during the 2016 election, allowing them to “identify the personalities of American voters and influence their behavior,” according to a report from The New York Times, which broke the scandal.
It’s easy to accuse Facebook and other social media networks of enabling data breaches. For example, during a Senate hearing, Rep. Larry Buschon R—I.N. accused Facebook of “listening to us on the phone” after his son, who likes suits, saw an ad on Facebook for suits. But while the potential for such obvious invasions of privacy is real (and perhaps even higher with Venmo, since it connects to bank account information), it’s not the scariest thing about social media’s relationship to data.
As The New York Times tech writer Kevin Roose told Michael Barbaro in a podcast, the companies that run social media, and the people who control them, are potentially much more powerful than a legislative body like the U.S. Senate. “[Facebook CEO Mark] Zuckerberg by himself controls a sort of supranational entity that is 2.2 billion people,” Roose said. “He can’t launch a nuclear weapon or start a war or collect taxes, but he can shape the behaviors and the information diets of many more people around the world.”
This observation points to the undemocratic nature of social media: while it does purport to give everyone equal access to platforms, the rules that govern these platforms are, for the most part, subject to corporate whims. Consider, then, this statement made by Dan Schulman, PayPal’s CEO: “Our mission is a very inclusive one. It’s to democratize financial services. Managing and moving money should be a right for all citizens, not a privilege for the affluent. It’s all citizens, all types.” But in terms of who controls the way this money is managed, Venmo is no different than Facebook. If it can figure out a way to make people buy into the idea of publicizing their financial transactions, it has near-complete control over the regulations that govern information about what we buy. Given that our purchases are a core part of what “shapes our behaviors,” this is a lot of power for a company to have.
The basic lesson from the recent Facebook scandal is that there need not be some sort of nefarious setup that allows Venmo or other corporations to “steal” users’ data in order to establish its control over it. That is, Venmo doesn’t have to take your data without your consent. All it has to do is convince you to willingly share your merchant transactions in the first place. Its success at doing so depends on shifting our conflation of social status with consumer identity into the virtual sphere. And the patterns for making this shift have long been in place.
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In his book “The Society of the Spectacle,” French philosopher Guy Debord theorizes that capitalism has created a society that is nothing more than “an immense accumulation of spectacles,” where we are inundated with “images” that merely represent what used to be directly lived. These images begin to construct our social relationships, until we can no longer distinguish the image from the real.
Debord published “The Society of the Spectacle” in 1967, when “world of images” merely referred to technology like newspapers and TV advertising. I imagine that if he walked into 2018 and saw how obsessed we are with uploading images of ourselves on online platforms, he would flip shit.
A key part of Debord’s theory is the idea that capitalistic values create a “vicious circle of isolation.” According to Debord, while modernity has drastically increased leisure time, the notion that this leisure time gives us freedom from work is hopelessly deluded. Take Facebook and Venmo as examples: both platforms claim to help people connect to one another. But Debord would say that by spending our leisure time on Facebook (and now Venmo), rather than connecting with each other, we are merely connecting to capital itself. As Debord states, “The spectacle is capital accumulated to the point that it becomes images.”
This statement prompted me to open the Venmo app. I scrolled through the social feed. “Molly T. paid Sam F., you know what it’s for. David P. paid Carl W., (pizza emoji).” I reflected nostalgically on my first days in the world of Venmo, when these posts seemed somewhat boring and harmless. Now, they seem like an insidious realization of Debord’s prophecy: an endless feed with images that reduce people’s identities to their monetary transactions.
I was reminded of what caused this whole Venmo obsession—I deleted Facebook for five months because I found it increasingly difficult to separate the impressions of people I gleaned from Facebook from the connections I had formed in real life. I started to feel like I was living in a world of mere representation, conflating “likes” with who I was as a person.
I took out a couple of dollar bills. Debord would say that these dollar bills were mere representations of reality that isolate us from our social connections by mediating them with a representational value. Compared to the Venmo feed, though, they almost seemed old-fashioned. Maybe I should delete my Venmo, I thought. Go back to the good old days of unbalanced debts, with no way to see if the guy I like is Venmoing some other girl for suspiciously romantic activities.
But I haven’t deleted the app, for the same reason that I have Facebook again—once you start blurring the lines between lived experience and social media profiles, you lose the ability to recognize the difference, and you become dependent on the latter. I want to settle my debts instantly, and I want to be able to send out scientifically-questionable surveys allowing me to make conclusions about peoples’ Venmo opinions without interacting with them. As technology reporter Ben Hammersley wrote in Wired, “The internet is where we live. It’s where we do business, where we meet, where we fall in love. It is the central platform for business, culture, and personal relationships. There’s not much else left … The internet isn’t a luxury addition to life; for most people, knowingly or not, it is life.”
Hopefully, some level of external regulation will stop Venmo from controlling all the money in the world. But there is little in place in our culture or government to prevent it from reducing people to representations in monetary terms. Thus, Venmo may be able to control us. And that reality may be closer to the present than we’d like to admit.
So, if you have any questions about what I’ve said in this article, please, don’t approach me in person. And actually, refrain from even commenting on my inevitable Facebook share of this article—where’s the money and the fun in that? Venmo request me instead. Throw some emojis in the comment section—I’ll get the message.
