Let’s go back in time for a second here. Remember when you used to go to dinner with friends and one person would pick up the tab and then you gave them cash? Or maybe you went out for drinks and when one friend got a round, you grabbed the next. Now instead of saying “I’ve got the next round,” you say “just Venmo me.” If you’ve updated your iPhone recently, you’ll notice the ability to text funds to a friend. You can send money via Facebook, SnapChat, PayPal, Square, etc.
As a whole, society has found a better banking system. We’ve found a system that works for us. Less fees. No minimums. No limitations. According to Aite Group, “Americans made about $147 billion in digital p2p (peer-to-peer) transfers last year, up from $100 billion from the year before.”
Banks are desperately trying to keep up with the ability transfer amongst peers. While banks have had peer-to-peer payment systems for years, they lack the branding and ease that apps like Venmo have. We don’t all use the same bank, and transferring funds between two accounts can become quite difficult.
So what does this all mean for you as a business owner? Well, people are now using things like Venmo and Paypal to augment their traditional banking activities. I’d be lying if I said I didn’t have a PayPal debit card that I use regularly.
Consumers are already using Venmo to split the bill with their friends but as a business owner, you can start accepting Venmo too. Just today I was scrolling through Instagram and saw that a restaurant I like is now offering Venmo. The businesses that will thrive are the ones that adapt. I always say market in the year in which we are living. If you don’t watch commercials and most people you know don’t watch commercials, don’t produce them. The same principle applies here. If you’re using Venmo on a regular basis and your consumers are likely to use Venmo, start accepting these alternative payment methods.
We live in a unique time where both entrepreneurs and consumers are actually changing the way that we have done things for centuries. Gone (or significantly reduced!) is the dependence on traditional banks. You no longer need to house your funds in a traditional bank when PayPal will generate reports for you and give you a debit card. You no longer need a bank for loans. You can seek alternative lenders who will work with you and your business instead of requiring your first born. We don’t see alternative banking and financing going anyway anytime soon, so how will you adapt?