Is Transparency Driving a New Normal?

Transparency and Cash: The New Normal

Transparency is transforming “pay me back later” into a thing of the past.

For years, if a group of friends wanted to split a restaurant tab and everyone at the table only carried big bills, the likely result was a series of verbal IOUs. Then the person who’d paid the bill would have to wait for their friends to either pick up the next tab, send cash or write a check, which involved finding a stamp, envelope and a mailbox, plus a visit to the bank by the recipient and a waiting period for the check to clear. Even under the most streamlined model, this was woefully inefficient and inevitably led to frustration.

Today, most people won’t wait for that kind of inefficiency. In an era when everyone has a mobile device on their person at all times, there’s no reason that payments to each other can’t be immediate, precise and safe.

PayPal started operating as a preferred source for online money transfers at the end of last century, but it was their purchase of Venmo in 2014 that truly brought peer-to-peer digital payments into the transparency era. Forbes referred to this entrant into one of the most crowded spaces in tech as “the crown jewel of all finance apps,” because not only does it reflect changing technology, but also changing social and privacy expectations.

Simply put, it’s not just a payment tool, it’s also a transparent social hub.

When you make a payment with Venmo, your “news feed” reflects what you spent it on, and to whom you sent the money, but not the amount. While it’s possible to add greater levels of privacy, the default setting is one of openness. Of course there are some limitations –users posting transactions for illicit activities may get flagged as inappropriate – but the nearly wholesale embrace of publicizing one’s transactions reflects a “new normal.”

In other words, despite risking that this level of openness might create a track record and lead to more questions, those embracing the notion that transparency translates to knowledge, growth and power, embrace what may seem to some people as “radical.”

The proof is in Venmo’s exponential results. The company was acquired for $26.2 million in 2012, then flipped for $800 million in 2013. That seems to have been a prescient investment as the company’s value and usage has continued to surge. In the 3rd quarter of 2018, the volume of payments handled by Venmo surged 78%, to $17 billion.

The clumsiness of your friend’s cash IOU is over. Now “Venmo it” is a verb in the same way that “Google it” or “Take an Uber” have entered the common vernacular – and transparency is a big part of what is driving the new normal.


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