Venmo users link their bank accounts or credit cards to the app so they send and receive payments using their smartphones. Users often send messages with their payments, which are visible on a public newsfeed by default unless the settings are changed.
As a result, consumer groups have criticized Venmo for its privacy policies. In February, the Federal Trade Commission (FTC) accused the payments app of misleading consumers about its security, as well as making it too difficult to change privacy settings. PayPal agreed to change its disclosures to more clearly explain how to limit the sharing of transaction details.
“We’re obviously pleased with the initial reception within the Venmo user base, with all the different services we put out,” said PayPal Chief Executive Dan Schulman in an interview, according to The Wall Street Journal. At the same time, “we want to be sure people understand just what they’re sharing and what their various options are,” he added.
While a small survey found that 88 percent of Venmo users “indicated indifference [toward] whether their transactions were shared or private,” 88 percent of people who haven’t used Venmo aren’t thrilled about a social network element inside a payments app. Venmo, though, recently noted showing its users a tutorial about privacy settings when they open the app — one indication that PayPal is taking the concerns seriously.
Venmo’s growth is important to the company for good reason: Activist investor Third Point LLC cited Venmo’s potential as a big reason for why it recently took an $800 million stake in PayPal.
In June, PayPal launched a Mastercard-branded debit card. The aim, according to the company, is to enable consumers who use Venmo to spend their balances in more places. Last month, Uber and Venmo announced they are partnering to deliver a new payment experience with Uber and Uber Eats.