The future of money will have nothing to do with money. Unlike the mid-90s hip-hop song, it won’t be “All About the Benjamins.”
Instead, according to Michael Vaughan, the chief operating officer of Venmo, the mobile payment app owned by PayPal, the focus will be on improving the experience of accessing and spending your hard earned cash. Or making it easier for you to repay your friend for the $10 burrito he purchased for you.
“We didn’t invent a new technology,” Vaughan said of Venmo, which is now processing almost $20 billion per year. “What we did was change the experience, making it faster, simpler, and more connected.”
It was Thursday afternoon at Northeastern, in the event space on the 17th floor of East Village, and Vaughan was addressing the changing nature of money with a standing-room only crowd of students, faculty, and staff. His talk—which included a brief overview of Venmo as well a lengthy Q&A with President Joseph E. Aoun—marked the latest installment of “The Future of…,” a presidential speaker series aimed at exploring the topics that shape our lives.
Vaughan joined Venmo in 2011, when five friends were running the company from an apartment in Philadelphia. Now its mobile-payment app is used by millions of people, who make billions of dollars in transactions every year, and Fortune has named the business the eighth most innovative company in finance. It even employs a handful of Northeastern alumni and co-op students.
Vaughn spent the vast majority of the hourlong event answering questions from attendees, social media, and Aoun himself, holding forth on topics ranging from the government oversight of apps like Venmo to the global war on cash.
Aoun asked him how the company plans to expand beyond the U.S. “When you get outside the country, you get fragmented cultural environments with different perceptions of what’s acceptable to share, and we’re being very deliberate and thoughtful about making sure that we’re ready for that,” Vaughan explained. He then added that seeing firsthand the triumphs and tribulations of PayPal has helped to inform Venmo’s future plans, particularly as they relate to working in other languages and with foreign currency. “PayPal has tackled all those same issues,” he said, “and we benefit from all that learning.”
One virtual attendee, who was watching the event on Facebook Live, asked Vaughn to describe the difficulties of building trust with Venmo users, who must first link the app to a credit card, debit card, or checking account before transferring money. It was hard in the beginning, he said, particularly because new users were the first among their family and friends to download the app and weren’t sure that it was safe. But then the company solved this problem, he explained, implementing a so-called public feed, wherein users could see the day-to-day transactions being made by their peers.
We didn’t invent a new technology. What we did was change the experience, making it faster, simpler, and more connected.
“I don’t know those people, but they sound like me,” Vaughan said, echoing the thinking of the typical first-generation Venmo user. “If I see people paying the babysitter, I know I can use this to pay the babysitter too.”
Another attendee wanted to know if Venmo felt threatened by big banks’ recent push to take back the peer-to-peer mobile payment business by launching an app of their own. According to a Bloomberg report in February, 19 banks, including Bank of America, Citigroup, and JPMorgan Chase, are teaming up to start Zelle, an app that will let users send and request money like Venmo. Vaughn did not appear to be concerned, noting that “I’m not terribly threated by what I see out there.”
“The reality is that people have money in banks, which have a service to provide,” he said. “I don’t think they’re trying to be Venmo. I think they’re trying to improve their service, which I think is a good thing.”
One student in the audience told Vaughan that his mom recently joined Venmo, which, he said, has changed some of what he shares on the app. He wanted to know whether the company is looking to attract a particular type of user.
“If Venmo is cool today, we don’t want it to be uncool tomorrow,” Vaughn said. “We want you to keep using it and we also want your mom to use it.” He added that he’s heard of cases in which Venmo has served to bridge the generation gap between college kids and their parents, who have used the app to transfer some money along with a cute note.
One of the final questions of the evening focused on the global push by lawmakers to eliminate the use of physical cash around the world. Another student attendee wanted to know whether Vaughan was concerned that going digital would give financial institutions and big government too much power over the lives of private citizens.
“We’re not trying to replace cash. We’re not trying to replace your wallet,” he explained. “Cash is not going away. Credit cards are not going away. We’re not in the business of deciding whether cash should be here or not. We just know it’s not going away.”