VENMO – SWOT Analysis and Business Profile

Introduction

Venmo is a unique mobile application that works on P2P System. A P2P system is a peer-to-peer system that allows the user to transfer funds in a few taps. The model is based just like a Social media platform where friends and family can interact.

Venmo’s App allows the user to transfer money without the hectic banking and cash transaction process.

The Venmo payment transaction app is being used at around 2 million locations within the United States. The company was acquired by Braintree, a fintech payments company in 2012.

After that in 2013, PayPal acquired Braintree for $800 million. It means that PayPay now becoming the ultimate parent company of Venmo.

The concept has been a huge success since its inception and has been modified over the period. A peer to peer system that is simpler to handle financial matters is all this millennial generation needs.

In this article, we will discuss the detail of Venmo’s SWOT analysis by covering all of the important opportunities, threats, weaknesses, and straight of Venmo.

But before looking into the, let see its company profile first.

2020 Venmo’s Company Profile:

NameVenmo
Websitehttps://venmo.com/
FounderVenmo co-founders Andrew Kortina and Iqram Magdon-Ismai
CEODan Schulman
LocationNew York, United States
HeadquartersNew York, United States
Year of incorporation2009
RevenuesAround $200-300 million in 2019
Net profitNo Concrete statistics. PayPal CFO John Rainey told CNBC in April 2019 that Venmo won’t make money this year and profits are “not something we put a timeframe on.”
Key products/servicesMoney Transfer Services, Peer to Peer Money Transfer, Funds Transfer
Key competitorsSquare Payments, Amazon Pay, Stripe Payments, WePay, Payoneer, GoCardless
Venmo
Venmo

 Let’s have a Look at the Strengths, Weaknesses, Opportunities, and Threats of the company.

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1) Venmo’s Strengths:

  • Free-of-charge usage of Venmo is its biggest strength.
  • The Use of the newest technological developments in the app makes it easier to use and user friendly.
  • Consumers can conveniently make payments from their phones upon few taps rather than engaging in hectic cards and cash payment mechanisms.
  • The structure is made like a social media app where friends and family can exchange money. This has made life easy for many customers.
  • The Quick transfer process is liked by millennials. Having the option to transfer money in less than a day makes it better than its competitors.
  • Venmo’s marketing campaign targets millennials.  The theme signifies the vision of the future and how faster, simpler ways of transferring money can speed up things for new start-ups and business owners.
  • Global Presence: Being a subsidiary of PayPal it has a presence in over 202 countries which makes it the largest player in the electronics/mobile payment industry. It has expanded itself quickly in the emerging market and is setting its footprint all over the world.
  • Large Customer Base:
  • The customer base is huge which makes it a huge success. There are around 192 million users as per reports from 2016 with registered accounts of 15 million users. Venmo is operated in 25 different types of currencies making it easier and friendly for transactions. This has increased its worldwide acceptance and make it trustable among the customers. 
  • Strong Backing: Venmo, initially bought by Braintree and then acquired by Paypal has strong backing. Paypal being the global financial payment system giant provides strong backing to Venmo.
  • Ease of Use: It’s easier to use for everyone. Individuals, as well as business owners, can easily create an account and transfer money in a few taps of the mobile screen.
  • Due to its user-friendly and social media like interface, it reduces the awkwardness of asking someone for money directly.
  • Convenient and easier to use for old age people also the young ones.
  • Free transactions with the exception of credit card transactions.
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2) Venmo’s Weaknesses:

  • Need to occupy more place in a large market like South Asia
  • In countries like India and Pakistan where the IT and freelance industry is booming, Venmo can be a great attraction
  • Take a few hours to days while completing the transaction of the money.
  • Money can be sent to the wrong person or wrong accounts that aren’t retrievable
  • Not entirely secure, there are plenty of loopholes in security
  • The accounts can be hacked
  • Mobile theft can cause a loss of money and account.
  • Customer service and support are not up to the mark. Need to have global customer service centers across the world. The response should be quicker

3) Venmo’s Opportunities:

  • Huge Potential for growth and development of the business.
  • The Era of Globalization and Smartphones have made it easier to order, purchase, and get drinks at home.
  • The era of globalization and social media has totally changed the global dynamics
  • Free world trade and online business has increased online transactions and trade
  • The E-commerce industry has increased many opportunities for young businessmen and entrepreneurs to do global ventures. For those businesses, apps like Venmo are great to ease.
  • South Asia and the Asian industry can be a huge market for Venmo.
  • New Ideas like Group payments can be a good addition to Venmo
  • With the advancements in technology and innovative ideas, integration with other social media applications can be a great positive.
  • There is an opportunity to Reach international markets like Asia and other markets which will expand the business more
  • Integration with other companies like “Apple Pay” can boost the app.
  • Enhance the social aspects of Venmo. Introduce new concepts like events at Social media, engaging people to do more transactions i.e Birthday, Wedding Gifts
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4) Venmo’s Threats:

  • Government regulations keep on changing and it will stay a threat for any sort of Market. The licensing rules and laws may change at once for any mobile application that is directly involved in the transfer of money. The government may ask about user information, tax deductions, etc in different parts of the world.
  • Uncertain laws in different countries regarding transactions and money transfer.
  • Threats from other money transaction apps gaining market share.
  • Possible changes that may affect the external environment are political, economic, social, technological otherwise known as PEST.
  • Political changes have an important influence on the industry. Changes in political leadership and government policies can damage the business. Recent examples of Ban on Tick-tock, PUBG, and other apps in different countries of the world can show that a sudden decision can end the business in a country in a matter of days. The company needs to work on alternative plans and to avoid any sanctions in different parts of the world.
  • Technological enhancements and an increasing number of apps on the Play store and apple store have increased the competition. If the global markets like Asia are not reached at the time, some other apps might take overusing the same concepts and occupy the regional markets.
  • Social issues may occur due to the older generation which is more likely to use the old methods of transactions.

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