September 1, 2016

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How safe is venmo and why is it free

With the growing use of smartphones and increasing access to Internet, there has been mushrooming of tech startups. These start ups make things very convenient for users by providing a range of facilities with just a few clicks. Like many of the tech start ups, Venmo has also made life easier. It started operations in 2012, and began as a ‘payment system through text messages’ and was soon acquired by Braintree. And later transformed into ‘digital payment service’, by providing freedom from cash and check transfers. Venmo allows users to make digital payments by transferring digital money in accounts. And hence requires credit cards, debit cards or checking account to be linked with the application.

Being a free mobile application available across all operating systems,Venmo saw billions of downloads and soon became a hit among the users. Venmo ensures bank level security, by providing user data encryption and pin codes to secure information, since it is linked to user’s bank account. However there have still been instances of misplaced transactions, security breach, and theft, which have shaken user’s faith in the application. But the company has also come up with a way to appease its uses, if none of this helps in protecting a user, the company will pay them $50 as compensation, only if it is contacted within 2 business days.

The greatest problem with Venmo remains to be its inability to send timely emails to it’s users informing them about changes in account information. This made it very easy for hackers to change passwords of user’s account, with the user being totally oblivious about this development. The users then blamed the company for lack of security for its users. There is however a lot of scope today for the growth of such digital platforms, and start ups because today we live in a world of virtual reality, wherein everything is done virtually, using Internet. However with increasing virtuality, there is an increased risk to the user’s security and privacy as well, due to which these digital platforms continue to be at an all time risk.

Most of the start ups or digital platforms earn through advertisements. However that is not the case with Venmo. It does not perturb its users with senseless and continuous advertisements, instead it charges them with a transaction fee. This fee is 3% of the transaction amount, applicable only when using  a credit card. The transactions made using a debit card or checking account do not involve any transaction or processing fee. This reportedly led Venmo to operate on zero revenue lately.

Venmo recently ventured into social networking as well, by introducing it on the application to make things even more convenient for the user. Today we book tickets, call for cabs, do shopping, order food etc online. For all these we also need a platform to enable us to make payments online, that too without cash. And this has been done by Venmo, it does not make us vulnerable to threats but only adds on to our experience of virtual reality.


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