WASHINGTON -- I usually find it distasteful to evangelize a smartphone app. But within the past year, I've given this spiel to any smartphone owner I go out to eat with: "It's like Facebook and PayPal combined -- only a better version of both of those things," I say. "Just download it."
The app is called Venmo, and it allows you to exchange payments with people in your social circles via your smartphone. It's free to download and use, so long as you link your account to your banking account or a debit card (using a credit card carries a 3 percent transaction fee). The app links your Facebook friends and email contacts to your bank account. All data is sent over a 256-bit encrypted connection -- the same encryption method used to protect classified government information -- and transactions are protected by the Federal Deposit Insurance Corporation. Friends you've opted to "trust" can automatically withdraw money from your account (though I haven't "trusted" anyone with that option yet). Expenses among your friends are then displayed in a Facebook-like stream, a feature the company added last year. (But if you're uncomfortable with your Venmo contacts seeing how much you spent on, say, Beyoncé tickets, you can choose to keep transactions private.)
Since the app works directly with U.S. banks, Venmo payments can be "cashed out" into your bank account overnight on business days. If you opt not to cash out, the money accumulates in your Venmo balance. Right now I have $55.16 in my Venmo account, so the next time I go out to eat or split a cab, I can offer to Venmo a friend my share of the tab. And -- this is a more dubious perk -- since you've already sunk the cost that's been repaid to your Venmo account, the cash reserve in your Venmo balance starts to feel like free money.
Google Wallet and Venmo's other main competitor, PayPal, charges a 2.9 percent transaction fee for sending money directly from debit and credit cards (whereas Venmo only charges a fee for credit cards). Another option, Popmoney, takes three days to transfer funds and only works with certain banks. Venmo's main advantage over PayPal is the simplicity of transactions combined with its social user interface. PayPal has predominantly one-star reviews on the app store, many of which bemoan its unreliable transfers.
The beauty of Venmo is its utter lack of drama: You link up your debit card, find friends, and you're ready to go. By my count, it takes a total of four clicks -- including opening the app -- to send or receive a payment from one of your set Venmo contacts.
Which is all to say that Venmo is the quintessential app for the urban professional twentysomething. It capitalizes on our social media fetish and on the stinginess that comes with working underpaid jobs, living in group houses, and going out with friends multiple times a week. It would be unseemly for a salaried, health care policy-owning, capital-A Adult to Venmo his co-worker for that $7 whiskey ginger at happy hour. But a 23-year-old working a minimum-wage job while trying to avoid a hermit's life? Yeah, he wants that $7 back. The app has boundless applications for the most mundane of shared expenses. The electric bill is due? Venmo your share to the roommate whose name is on the utility bill. Don't want to bother splitting the brunch check five ways? Split it two ways instead, and three people will have some Venmoing to do. Bought a drink for a co-worker at happy hour? Venmo-charge them five bucks. (OK, that last one is a total jerk move.)