Despite the fact I blew out 36 candles on my last birthday cake and I have been unable to identify most of the “celebrities” on the covers of magazines for at least ten years, I still tend to think of myself as a young and with-it individual who has her fingers on the pulse of American culture.
Then I heard about Venmo, and I realized I was middle-aged.
Venmo, for the uninitiated, is a peer-to-peer payment app that allows you to exchange funds with people in your social circle. The app is free to download, and other than a 3% charge on credit card transactions, it is free to use. It links to virtually all U.S. banks, and works quickly and intuitively, allowing you to send, request, and receive money instantly. Money transferred via Venmo can be “cashed out” to your bank account overnight on business days, avoiding the three-day hold many of its competitors force users to wait. The app makes it much easier to split bills and payments in our increasingly cashless society.
But perhaps the aspect of Venmo that this Gen-Xer found to be most shocking was the social media component. Unless you turn it off, every payment you make is broadcast as content over the Internet: “Emily G. B. paid Philip T. for lunch.”
While the amount of payment is kept private, the simple fact that the wider Internet (or even just your circle of friends) can know how you are spending your money seems like lunacy to me.
After shaking my head about “kids these days!” I started to wonder if perhaps they were onto something. Clearly Venmo—which processed $906 million in the fourth quarter of 2014—is filling a need. Is my horrified reaction to it based upon good financial sense or a fear of technology?
I decided to look at some of the actual Millennial attitudes toward Venmo (and its ilk) to figure out what is behind this generation gap:
Sunlight Shines on What Used to Be Private
Every 30-something I have mentioned this app to has responded with, “Why would anyone care?” That’s because people my age regard the sharing of financial information as both nobody’s business and inherently uninteresting.
That feeling of incomprehension partially reflects the fact that we grew up in a time when our every move was not recorded for posterity. Millennials are used to sharing everything, from the potty training pictures their parents posted online for the world to see (eww) to the fact that they paid their friend’s boyfriend’s sister for the cab ride last night via Venmo.
But as much as my generation cannot comprehend this level of sharing, feeling comfortable sharing financial information potentially puts Millennials in a much better place, money-wise. Older generations consider it the height of rudeness to discuss money, which means financial assumptions proliferate among Boomers and Gen-Xers, including such damaging beliefs as “Debt is just part of life.”
Millennials are able to have a more nuanced look at money conversations. They know that anything they want to keep private on Venmo can be shielded from public view, and they recognize that there is nothing inherently wrong in letting the world know how they spend their money. This openness can help them to break through the social taboo against any money discussion, and I think our society will be the better for it. Once money is up for public discussion, individuals will be in a much better position to make intelligent financial decisions.
You still won’t see me sharing my every payment on Venmo’s content stream, however. Some childhood lessons cannot be easily shaken off.
The Changing Face of Security
Something that seems counterintuitive to me about the popularity of Venmo among 20-somethings is the fact that Millennials tend to score low on measures of social trust. According to a recent Pew survey, only 19 percent of young adults between the ages of 18 and 33 believe that “most people can be trusted.”
How odd, then, that so many Venmo users are willing to trust their financial information and link their bank account to an app—particularly considering the fact that Venmo has experienced two different high-profile fraud cases just this year.
However, it may be that Millennials might have the right idea after all. NPR’s Noah Nelson interviewed Venmo user Amanda Mae Meyncke, who is not at all concerned about potential fraud:
“I’m not too worried about that sort of thing. Because even if fraud does occur it seems like the company will help you out with it…and your money’s insured through the bank.”
Meyncke is absolutely right: the company has helped victims of fraud to recover their lost funds, and all transactions are FDIC insured. In addition, Venmo uses the same 256 bit encryption security that big banks use for their transactions.
Ultimately, your money is probably safer when you exchange it over Venmo than it would be if you were carrying the same amount of cash, since cash has a nasty habit of simply being gone once it’s stolen or lost. Trusting a peer-to-peer payment app with your money is actually a fairly practical point of view when you actual run the cost-benefit analysis.
The Kids are Alright
Each generation has a tendency to regard those that come after with suspicion and condescension. After all, the way “kids are doing things these days” is both unfamiliar and a little scary to the old guard.
But taking the time to look at why the next generation has embraced new technology and new money attitudes can help us all to understand the benefits to their new methods. I may never feel entirely comfortable with peer-to-peer payment apps for myself, but it’s illuminating to realize that today’s young adults are making practical and informed choices that will help them to better deal with their finances.
Only an entrenched Old Fogey would seriously try to criticize that.