In 2012, Andrew Kortina and Iqram Magdon-Ismail publicly launched Venmo, a money sharing app. Users can link their bank accounts to the app, and through Venmo’s top tier security, an individual can quickly and safely transfer money with members of their community. The app is also a social media platform, allowing users to publically or privately document their transfers. Venmo has become a crucial part of the rapidly growing shared economy. The shared economy is primarily defined by its environmental, economic, and social sustainability, and Venmo, a facet of the growing shared economy, encompasses these three aspects of sustainability.

Venmo’s Environmental Impact

An environmental appeal of using Venmo is the elimination of paper money. As paper dollars were originally made from freshly harvested cotton and linen, many people assume that paper dollars are still made from these materials. Cotton production in particular is an environmentally dangerous process. Vast amounts of resources and land are required for cotton production, and its extreme use of water, pesticides, and fertilizers negatively impact the environment. Eliminating paper money seems environmentally smart; however, what many people don’t realize is that today, paper money is no longer traditionally made from cotton and linen. In Nina Rastogi’s Slate article “How Green Are Greenbacks?” she states, “Dollar bills are made from recycled, low-quality waste fibers that would otherwise end up in a landfill.”

Another appeal of using Venmo is the elimination of coin production. Like paper money, coins today are often made from recycled materials, specifically old coins. However, a large majority of coins are still made from traditional methods and materials. Extracting the metals required to make coins is environmentally harmful and requires intensive energy.

Although paper and coin money production have improved drastically in environmental awareness over the years, using Venmo is a very appealing alternative to people who are conscious of traditional money-making methods.

Venmo’s Economic Impact

Venmo appeals financially to many people. Users of the app can pay their friends easily and instantly, free of charge. The app itself is free, and if used with a bank account or debit card, transactions are also free. Additionally, users can create a Venmo Wallet, which is essentially a small bank account. The Venmo Wallet is a convenient feature because rather than go through the process of transferring money from a bank account to Venmo then to a friend every time a transfer is made, users can skip that first step and instead just occasionally add money into their Venmo Wallet from their bank account. Users can also link their credit cards to Venmo; however, users who make payments via credit card accounts are charged with a three percent transaction fee.

Financially, Venmo is convenient for people who have access to a bank account. But those who don’t have access to a bank account are excluded from the company. In a CNN Money article, “10 million U.S. households don’t have bank account,” Blake Ellis reveals that about eight percent of U.S. households lack a bank account. According to the article, this is due to multiple factors. Many people do not have enough money to open and fund a bank account. Ellis states, “Greg McBride, senior financial analyst at, said that checking accounts can be costly for some consumers — especially for those living paycheck-to-paycheck who can’t meet minimum balance requirements and get hit with fees or those who are chronic overdrafts.” Low income households are excluded from the banking system, and therefore, are excluded from Venmo. Another social group that faces discrimination from the banking system and therefore from Venmo is former inmates. For individuals with criminal records, it is very difficult and sometimes impossible to open a bank account. The article also reveals that many people cannot open a bank account because they lack proper identification. Such a requirement excludes non U.S. citizens from the banking system, so only U.S. citizens can access Venmo. Although Venmo claims to be a free, easy-to-use app, it’s requirements ultimately exclude various social groups.

Additionally, Venmo poses a threat to the traditional banking system and all those who are employed by banks. In an interview, a US Bank employee of a Portland branch chose to anonymously reveal her concerns about the growth of Venmo. “US Bank has our own online sharing system that’s kind of like Venmo, but our system isn’t free…I think for now, banks are fine, because even with Venmo, you’ve got to have a bank account. But Venmo limits banks in our ability to grow in areas like online transfer systems.” Clearly, with the way that the app currently operates, banks are crucial to the function of Venmo. However, with the success of Venmo and the danger it brings for the future of banks, those who work within the bank system are at risk of losing jobs.

For people with bank accounts and smart phones, Venmo is a financially appealing resource for sharing money. However, the company also limits its accessibility to certain groups of people and excludes groups such as non-US citizen immigrants, low income families, and former inmates.

Venmo in Social life

Venmo has many great features that allow for people to communicate with each other and safely transfer funds. As stated on the Venmo website’s information page, the company wants people to be able to “remember the moments you share with friends. Split dinner, send a birthday gift, or just say hello.” The app is designed to connect people and allow them to share their experiences through messages and pictures. The ideal situation for this app is for friends to do things like split the bill for dinner or to give a person gas money on a road trip.

The app is revolutionary because it uses a form of social media but also is used to make secure transactions and create business for those that are making small transactions. For example, Lewis and Clark Student Adrian Romero uses Venmo to buy and sell shoes. He claims that it is the safest and easiest way for him to assure that nobody gets ripped off. It insures confidence in both sides of the deal. In the app, it allows for people to not release the money until the product is received, allowing the buyer assurance that they will receive their purchase. This creates a new social norm where people can do business with complete strangers with confidence that sellers have no alternative motives or intent to harm. Adrian said, “It is perfect for the selling of rare shoes because it is easy to connect and negotiate prices in a secure environment.” Venmo helps bring the community together due to the security that it provides.

Another common use for Venmo is to communicate and send family members money for events or to support them in tough times. For example, many college students will run out of funds to buy essentials during the year. Their parents can send them a sum of money that can come with a message and remind them of the purpose of the money. As asserted by Julia Somers, a Lewis and Clark College student,  “I ran out of money for my last month of groceries so I messaged my mother in Venmo and made a topic of ‘groceries.’ My mother then transferred me money under ‘groceries’ and then I sent the money I didn’t use back to her under the same topic.” Venmo makes connecting and sharing money between family members quick and easy, and it records the entire process.

Venmo is revolutionizing the social sphere and how we are interacting our financial dealings. Venmo instills confidence in strangers, creates a safe way to quickly transfer money, and allows people to transfer money and memories. Thus, Venmo expands the shared economy and revolutionizes how we purchase items.


Venmo is a diverse app that allows for many new opportunities in social and economic life. It is revolutionizing the way people spend money and create business. The shared economy is exponentially increasing because of this app and creating new markets for people who can find a way into them. Venmo is creating a new way for people to communicate and expand their social sphere and share the memories they partake in. Venmo is greatly successful and has even been purchased by PayPal which increases its net worth and support system. This support from the traditional economy proves that it possible  

Works Cited

Is PayPal’s Venmo the Bank Killer App?

Somers, Julia. “Social Impacts of Venmo.” Personal interview. 25 Apr. 2016.

Romero, Adrian. “Venmo in Personal Sales.” Personal interview. 25 Apr. 2016.

“Venmo.” .com. N.p., n.d. Web. 01 May 2016.

Bank Employee, Anonymous. “Economic Impact of Venmo.” Personal interview. 29 Apr. 2016.

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