Venmo and how splitting the bill changed finance

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Who ordered all the cocktails?

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Venmo is a U.S.–based mobile payments app with a social networking component, founded in 2009 and purchased by Paypal (PYPL) in 2013. It allows users to send money to one another and share their transactions in public posts. Venmo helped popularize peer-to-peer (P2P) paymentsin the United States by making it easy to split restaurant bills, reimburse friends, and pay small businesses directly from a smartphone.

Venmo’s founders, Andrew Kortina and Iqram Magdon-Ismail, met at the University of Pennsylvania, where they were roommates during their freshman year. Magdon-Ismail visited Kortina in New York City, but forgot his wallet, and Kortina covered the expenses for the weekend trip. When Magdon-Ismail tried to pay Kortina back by mailing a check, it seemed out of step with the digital ways that they communicated and did nearly everything else.

The first version of Venmo was a text-message-based payment platform; Kortina and Magdon-Ismail sent each other the first payments. When they developed it further into an app in 2010, they kept the texting feature, giving it elements of a social media platform as well as a payment service. The two came up with the name by combining vendere (Latin for “to sell”) and mo (short for “mobile”).

The app launched in 2011 and was acquired the following year by online payments provider Braintree for $26 million. Not long after, PayPal acquired Braintree for $800 million. At the time, PayPal was still a division of eBay (EBAY), and when PayPal was spun off into an independent company in 2015, Venmo went along with it.

Under PayPal’s ownership, Venmo expanded from a simple P2P payment app into a broader digital payments platform. By 2025, the annual payment volume of Venmo had reached more than $325 billion, with roughly 95 million active accounts in the U.S.

Like credit card companies Visa (V) and Mastercard (MA), Venmo makes much of its money by charging a fee to the merchants and service providers who accept payments through its network. As of 2026, Venmo charges 1.9% + $0.10 per transaction to businesses. It also earns interest on the money that users keep in their Venmo accounts, and charges users a 1% fee to access that money instantly, rather than waiting one to two days to move the money to their bank accounts.

As Venmo expanded beyond peer-to-peer transfers, it added revenue streams through business payments, online checkout services, and debit and credit card products.

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Pay from the comfort of home (or wherever).

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Peer-to-peer (P2P) payments take place on an encrypted network that allows people to send and receive payment without sharing bank information, although each user’s digital wallet is usually linked to a bank account.

Venmo helped bring P2P payments into the mainstream by making it quick and easy to send money directly to another user on the network. That speed and ease of use made the app popular for splitting restaurant bills, reimbursing friends, and handling other everyday transactions.

The growth of Venmo, Zelle, and other fintech platforms helped accelerate the shift from cash and checks to digital payments.

Venmo made an early splash with its social networking feature, which allows users to make transaction details available to the public or just to their network of friends. For a generation that grew up broadcasting their lives on social media, this was an attractive and fun element.

The default setting on Venmo is for transactions to be shared publicly, although users can make their transactions private. Public posts typically show who paid whom and any accompanying notes, but not the transaction amounts. Venmo also tries to encourage interaction on its app by offering people the ability to add comments, emojis, and likes to their transaction history.

Venmo’s social sharing features and account policies have drawn scrutiny from regulators and consumer advocates.

The company also faced scrutiny from the Consumer Financial Protection Bureau (CFPB), which investigated Venmo’s debt-collection and funds-transfer practices beginning in 2021. The CFPB closed the probe in 2024 without taking public enforcement action against the company.

In an increasingly digital world, Venmo tapped into a strong desire. Competitors followed, such as Cash App, Zelle, and Apple Cash. These well-capitalized companies are backed by major players in the finance and technology industries, and are trying to capture as many P2P transactions as possible. Apple has made its Apple Cash function easily accessible through the iPhone. Cash App is owned by the popular mobile point-of-sale payments facilitator Block (formerly Square). And Zelle has done away with an app altogether, instead operating through the apps offered by 2,300 banks and credit unions.

To take on that competition, Venmo rebuilt its app experience from scratch in 2026. The new version emphasized popular features like personalized discounts, cash-back offers, and business recommendations. It also added more emojis and GIFs to liven up the social aspect of the experience, while making the privacy settings easier to access.

The increase in competition among Venmo, Cash App, Zelle, and Apple Cash reflects the growing role of digital payments in everyday commerce.