How to Make a Payment App like Venmo.

The payment methods have changed over the years, with cash payments now becoming equivalent to none; credit and debit cards were the new excellent payment method where the user only swiped the card, and the cash needs were decreasing. Credit cards became the new payment method, allowing users an instant loan with a nominal interest rate.

But today, the fintech apps like Venmo are at a peak. The fintech app projects are estimated to cross a whopping 2 trillion dollars by the end of 2023 due to their increasing popularity and easy-to-use nature. 

So without any further ado, let us start.

What exactly is Venmo?

It was founded in 2009 and acquired by PayPal in 2013, and Venmo is a mobile app with a desktop website.

To use Venmo, users must link their bank account, credit card, or debit card to their account. Users can then send money to each other by entering the recipient’s username, phone number, or email address and the amount they want to send. Users can also include a description or reason for the payment.

Venmo allows users to make payments for various purposes, such as splitting a bill at a restaurant, paying rent or utilities, or even sending money as a gift. Users can also see their transaction history and current balance on the app.

In addition to its payment services, Venmo also has a social aspect, allowing users to like and comment on transactions made by their friends. This feature has led to controversy and privacy concerns but can make the app more fun and engaging.

You must be wondering about an app with so many possibilities. How can you build one for yourself? Here is a complete guide.

Top Features of the Venmo App

While building an app for yourself, here are the features that the Venmo app has and that you must include in your next payment application.

Make Payments

The primary feature of a payment app is to make payments, and this is a must-have feature to include in your app by linking your bank account to facilitate payments that help to make and receive the payments as required.

Link Bank Accounts and Debit/Credit Cards

Another essential feature of a P2P payment service such as Venmo is the ability for users to link their bank accounts and debit cards in the app. This allows users to make payments directly from their bank accounts rather than depending on the built-in wallet. The linking of these elements helps make payments faster and safer.

Purchases 

Venmo, one of the most significant payment apps, has partnered with several businesses and websites to enable the app to make transactions on their websites. They established their API to streamline the entire process of the Venmo money transfer system.

To make your peer-to-peer payment system even more helpful and convenient, you should allow users to transfer money from their Venmo-like application to their bank account. Then they transfer funds from their bank account to their app wallet.

It would help if you also aimed for the ease with which Venmo P2P money transfers occur in your app design.

Payment Share Options

This is one most the most extraordinary feature of the whole Venmo payment system where the user can add their friends and family to their inbuilt social feed system where they can split bills and share money across the platform; this feature makes it great for a payment app as it eliminates the need for using additional bill splitting apps.

Data Encryption 

This is one of the most important features to add to your payment app. It is crucial to back your application with the highest encryption and privacy protection since the database and the backing of the app contain the personal information and bank account details of millions of users which, if compromised, can lead to significant fraud and losses to the company.

Money Request Feature

This feature is also integrated with the in-app social integration system, where one user can message or request money from the other user as required by clicking on the request money option. The user can pay the money with the approved option quickly.

Payment Track Option 

It is critical to allow users to track their financial history for federal financial regulations and user experience. This enables consumers to keep track of their spending habits, detect fraudulent activity, and make sound financial decisions.

Financial institutions might include a transaction history feature in their application to let users monitor their transactions. This feature can show users’ past transactions, account balances, and alerts or notifications. Sending mailers, such as weekly mailers, is helpful for keeping.

Security Integration. 

Adding more security layers always stays in style. Start-up has an option where the user can use app lock on the start-up page, enter the personal pin set up by them, and then the app starts; this feature is a must-have in a payment system.

Account Setting Personalization 

Account settings are the next critical feature that should be included in your P2P apps. Your users should have a place to update information and choose a preferred payment method, among other things.

ChatBots 

Your peer-to-peer payment software must include chatbots or virtual assistants to help consumers during transaction issues. Before even completing a simple purchase, users may have some questions. In such cases, virtual assistants can assist users in making jobs more accessible.

Platform to Buy and Sell Cryptocurrency 

Cryptocurrencies such as Bitcoin have been the talk for the past few years. You can include a feature in your Venmo-like peer-to-peer payment apps that allows users to buy and trade bitcoins efficiently and securely. 

This feature has the potential to change the game by attracting a large number of users who are interested in Bitcoin and other cryptocurrencies.

The features we just looked at are widely seen in many peer-to-peer payment apps; adding a platform where the users can sell and trade the crypto is one of the most popular features on the platform.

Steps to Build a Payment Platform Like Venmo: Factors to Consider 

Step #1: Integrating the App With all the Online Payment Methods

To cater to all your client’s needs, your mobile payment app should support three primary online modes of payment: eCommerce payments, on-the-spot payments at retailers, and P2P payments within the system’s network. 

However, more than merely offering these modes of payment may be required to set your app apart. To gauge your target audience’s interest in your app, consider incorporating various use cases associated with these payment modes, even the less obvious ones. 

Here are some features that your payment wallet app could offer to enhance the user experience:

Installment Plan Payments

The ability to pay a merchant in installments could be a valuable feature for users who want to make big-ticket purchases without paying the total amount upfront.

Taxi Cab Service Payments

Your app could calculate and display discounts for a particular ride and facilitate payment for the cab service.

Friend-to-Friend Borrowing

Users could send and receive borrowing requests from friends through the app, making it easier to keep track of outstanding debts.

Commenting on Borrowing Requests

Users could add comments to their borrowing requests to provide more context or information.

Borrowing Limits

 A feature that allows users to set borrowing limits for their friends, specifying the amount that can be withdrawn, the number of times it can be withdrawn, and at what intervals. This feature could be handy for parents who want to give their children an allowance while also controlling their spending.

Step #2: Add the Required Security Layers 

Mobile payments require a certain level of safety and security. When designing a mobile payment app, it’s essential to prioritize security by integrating a mobile payment gateway and adopting security measures such as data encryption, two-factor authentication, and compliance with regulations like PCI-DSS. Venmo is an example of an app with a streamlined and secure architecture that can serve as a model for app development. 

The app should use secure codes and fingerprint identification to protect users’ credit card numbers during transactions. By following these guidelines, you can ensure that your mobile payment app is secure and user-friendly.

Step #3: Avoid System Overload 

Mobile payment apps like Venmo experience rapid growth and increased user traffic over time. To ensure your app can handle this growth, it must be designed with scalability in mind. 

Even if your app grows slower than Venmo, planning for a significant and continuously increasing load on your system is essential. A cluster solution is an excellent approach to building a scalable system that can grow in proportion to the number of users. Venmo’s success is proof of the vast potential for growth in this business niche, so building a scalable system is a wise investment in your app’s long-term success.

Step #4: Designing a Separate Capability for Financial Data Synchronization

When users make transactions in a payment system, it triggers a chain reaction that requires the system to recalculate tracked amounts impacted by the trade. For systems with many users, this can result in thousands of recalculations happening simultaneously, which can overwhelm the system.

Rather than having the entire system chase every transaction, a more optimal approach is implementing a separate capability that adjusts all impacted amounts across the system at set intervals. Doing this helps control peer-to-peer data synchronization in payment apps, making it easier to manage the system’s resources and ensure smooth operation.

 This approach is essential for systems with a large user base to prevent overwhelming the system and ensure a stable and reliable platform for users.

Step #5: Choose the Suitable Development Technology

If your monetization strategy for your mobile payment app is similar to Venmo’s and focuses on billing merchants, ensuring your app can interact efficiently with eCommerce apps is essential.

 When creating a money transfer app, it’s important to consider essential features such as notifications, IDs and OTP verification, digital wallet, sending bills and invoices, and messaging. These features help improve the user experience of paying on Venmo. A slight delay in loading time can lead to a higher abandonment rate and loss of revenue.

Exploring the Revenue Model of the Venmo App

For any application to run properly and generate profits, it has a pre-decided stack of revenue generation schemes. We will be discussing the revenue below and how Venmo generates revenue. 

Transaction Fees

Transaction fees are one of the key ways Venmo generates revenue. Venmo charges a fee of three percent for credit card transactions, and customers can additionally pay a fee in order to speed up the transfer of funds from their Venmo balance to their bank account. While this fee is small, it can quickly add up, especially for users who frequently use Venmo for transactions.

Business Accounts

Another way that Venmo generates revenue is through its business accounts. Venmo offers business accounts to merchants and vendors, allowing them to accept payments from Venmo users. Similar to transaction fees. This fee is in line with industry standards for online payment processing and helps Venmo generate revenue from businesses that use the app to accept payments.

Instant Transfers

Venmo also generates revenue through its instant transfer feature. This feature allows users to transfer funds from their Venmo balance to their bank account instantly, rather than waiting the standard 1-3 business days for the transfer to be completed. Venmo charges a fee of 1% of the transfer amount. This fee is relatively small compared to the convenience of instant transfers, making it an attractive option for users who need quick access to their funds.

Interest on Funds

Venmo also generates revenue through the interest earned on funds held in user accounts. While the funds held in Venmo accounts are not technically deposits, they are held in custodial accounts that earn interest. Venmo earns a percentage of this interest, helping the app generate revenue even on funds that are not actively being used for transactions.

Partnerships and Advertising

Finally, Venmo generates revenue through partnerships and advertising. The app has partnered with various companies to offer special promotions and discounts to users who make purchases through Venmo. Additionally, Venmo has experimented with advertising in the past, displaying targeted ads to users based on their transaction history and other data. While advertising is not currently a major source of revenue for Venmo, it has the potential to become a more significant revenue stream in the future.

Venmo Credit Card

In 2020, Venmo launched its own credit card, which offers cashback rewards and allows users to make purchases using their Venmo balance. Venmo generates revenue through the interest and fees associated with the credit card.

Required Tech Stack for Building a Payment Platform Like Venmo 

Backend 

Laravel 

Laravel is a popular open-source PHP web application framework that provides developers with powerful tools and features for building scalable and robust web applications.

Admin Panel

Javascript

JavaScript is a high-level, dynamic programming language used for creating interactive and dynamic websites. It is widely used for front-end development but also back-end development through frameworks such as Node.js.

Laravel Novel

Laravel is a PHP web application framework that provides developers with a powerful set of tools and features for building scalable and robust web applications. It emphasizes developer productivity, code maintainability, and ease of use, making it a popular choice among developers.

Mobile Developement Programmes 

Java 

Java is a general-purpose programming language designed to be platform-independent, meaning that it can run on any device or operating system with a Java Virtual Machine (JVM) installed. It is used to develop various applications, from mobile apps to enterprise software.

Swift

Swift is a powerful and intuitive programming language developed by Apple for developing software for macOS, iOS, watchOS, and tvOS. It is designed to be safe, fast, and easy to use and includes modern features such as optional closures and generics. Swift is used for developing a wide range of applications, from simple mobile apps to complex systems-level software.

Payment Gateway 

Stripe

Stripe is a payment processing platform that allows businesses to accept and manage payments online, including credit cards, debit cards, and ACH payments.

PayPal

A widely used online payment system allows individuals and businesses to send and receive payments electronically, including money transfers and online purchases.

Braintree

Braintree is a payment processing platform that allows businesses to accept and manage payments online, including credit cards, debit cards, and digital wallets such as PayPal and Apple Pay. It is owned by PayPal and is designed to integrate seamlessly with PayPal’s suite of payment products.

Server

Amazon Web Services (AWS)

Amazon Web Services (AWS) is a comprehensive cloud computing platform that provides a wide range of infrastructure and platform services for businesses and developers to build, deploy, and scale their applications and services.

Utilities 

Firebase

Firebase is a mobile and web application development platform that provides developers with tools and services for building high-quality, scalable, and secure applications.

Twilio

Twilio is a cloud communications platform that enables developers to build applications that integrate voice, video, messaging, and other communications capabilities.

Facebook SDK

Facebook SDK (Software Development Kit) is a set of tools and resources provided by Facebook to developers for building applications that integrate with the Facebook platform, including Facebook Login, sharing features, and analytics.

Google SDK

Google SDK (Software Development Kit) is a set of tools and resources provided by Google to developers for building applications that integrate with various Google services, including Google Maps, Google Analytics, and Google Drive.

Conclusion 

building a payment app like Venmo requires careful planning and execution. It’s important to prioritize security, scalability, and efficiency in your app’s architecture to ensure it can handle the growing number of users and transactions. Features like data encryption, two-factor authentication, and compliance with regulations like PCI-DSS should be included to keep your users’ financial data secure.

To create a payment app that is competitive and user-friendly, you should consider integrating features like notifications, unique ID and OTP verification, digital wallet, sending bills and invoices, sending and receiving money, transaction history, and messaging. These features can improve your app’s user experience and help retain users over time.

Optimizing your app for efficient and smooth operation is also essential to avoid delays or errors that could lead to lost revenue. Building your app as a cluster solution can help prevent overloading and ensure your system can grow proportionately to its growing user base.

If you want to build your payment app, consider partnering with Idea Usher. Our team of experienced developers can help you bring your dream app to life using cutting-edge technology and a focus on delivering high-quality, user-friendly solutions. Contact us today to learn more about our services and how we can help you create a successful payment app like Venmo.

FAQ’s

Q. What are some key considerations when designing the user interface (UI) of a Venmo-like app?

A. When designing the UI for your Venmo-like app, it’s essential to keep it simple and intuitive, with a clear flow for users to send and receive payments. Some key considerations include choosing an easy-to-read font, using a consistent color scheme, and minimizing the steps required to complete a transaction. You should also ensure your UI is optimized for mobile devices since many users will use your app on their smartphones.

Q. How can I implement payment processing functionality in my Venmo-like app?

A. To implement payment processing functionality in your Venmo-like app, you must integrate with a payment gateway or payment processor API, such as PayPal or Stripe. This will allow users to securely transfer funds between accounts and for you to collect transaction fees. You will also need to comply with industry regulations such as the Payment Card Industry Data Security Standard (PCI DSS) to ensure the security of user data and transactions.

Q. How can I ensure that my Venmo-like app is secure?

A. Security is a critical consideration for any payment app, and you must implement strong security measures to protect user data and transactions. This includes using encryption to protect sensitive data, implementing two-factor authentication (2FA) to prevent unauthorized access, and regularly testing your app for vulnerabilities. You may also need to comply with data protection regulations such as the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA).

Q. What marketing strategies can I use to promote my Venmo-like app?

A. To promote your Venmo-like app, you can use various marketing strategies, such as social media advertising, influencer marketing, content marketing, and search engine optimization (SEO). Also, consider partnering with businesses or services your target audience frequently uses, such as ridesharing or food delivery apps. It’s important to continuously track your marketing efforts and adjust your strategy to maximize user acquisition and engagement.

Q. How can I measure the success of my Venmo-like app?

A. To measure the success of your Venmo-like app, you can track metrics such as user engagement, retention, and transaction volume. You can also conduct user surveys or gather feedback through app store reviews to identify areas for improvement. It’s important to continuously analyze your app’s performance and make updates as needed to ensure that it meets the evolving needs of your users.