Zia Hassan

Layers In Cash Transfer Apps

I was explaining Venmo/Cash transfer apps to a person who is firmly part of the generation above me.

“So you can see people’s transactions?” he asked me, wide-eyed.

“Yeah, but you can’t see how much the transaction was,” I told him.

“So what’s the point?” he asked.

What is the point? For years, PayPal allowed people to transfer money to each other. Why did Venmo and Cash become everyone’s first choice over PayPal?

Because these apps offer two things:

  1. A quick way to transfer money.
  2. A status signal.

PayPal actually used to (and still does) pride themselves for being the “secure” platform. No one would ever gain access to your transactional data, they promised. And other than some rate breaches, they kept this promise.

But Venmo and Cash make that part of the experience. Who you hang out with speaks volumes about you, especially if you’re part of a wider community. And, just like on Instagram and Facebook, enjoy showing off who we’re hanging out with, especially if they’re well respected in our community.

So when people use Cash and Venmo, friends might see a transaction and be impressed that you had “dinner and drinks” with someone high status. Or that they are so close to you that they leant you money! Or that you do business with them.

It’s the opposite of PayPal’s model, yet it wins.

We’ll give up a piece of our lives that used to be private to get more chances to show our status.