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One of the nice things about living in Chicago is the ease at which my wife and I can meet our friends for a casual weekend dinner. Two or three couples get together for a nice dinner somewhere, we have a few cocktails and I wake up with a decent hangover the next day. Rinse and repeat. In the middle of all these small plates and overpriced table wine is the check, and someone has to pay the piper.
“Here, I’ll just put it on my card and you guys can pay me back later.”
(Long pause as no one wants to speak up and rebuff the offer because then you’re the one that has to calculate the tip and who has the nerves to figure out how to deduce 20% from $287.48 under pressure and three old fashions)
Now the common practice is to Venmo that person that night or the next day and forget about it. But what if Venmo wasn’t exactly the revolutionary tool we were led to believe? See Venmo is a phenomenal idea that rode off the coat tails of Chase Quick Pay and said, “why not just make this awesome service available to everyone with a bank account?” This concept was revolutionary as this type of service was only be available to commercial clients and actually cost money on a per transaction basis. Pay a fee when I send Becky money for my challah french toast and mimosa?
No thank you.
But while Venmo is the best innovation to come from the financial industry in the last decade, it is easily the worst way for you to pay people for dinner, dog walking or drugs.
Venmo is owned by Pay-Pal, and while I am sure it puts your financial security top of mind, it is no bank. Banks are the most regulated industry in the country and it is not even close. This means ensuring your finances and personal information is the most secure it can be. So secure, in fact, major banks pay over $1.5 billion a year to make sure no one but you can access your shit.
See you need to make sure your money is safe. And using Venmo almost ensures you are doing just the opposite. Financial security is literally priority #2 (after making money) at a bank due to the reputational, regulatory and monetary risk associated with a security breach. That is why bank’s developed Zelle. It works just the same as Venmo (less the snowflake emojis) but in a significantly safer manner.
That being said, fin-techs pose a significant risk to your typical retail bank. Why bother going into a branch when you can do everything from your couch in your underwear? I certainly don’t want to deal with you bitching about a $30 overdraft fee just as much as I know you don’t want to come in and interact with me. Isn’t that what we are all looking for? Freedom from personal interaction and confrontation?
With no personal interaction also comes to demise of brick and mortar bank branches. I am hesitant to fully compare how Amazon and other online retailers have proven that people have no problem running their lives from the smart devices because when you are talking about people’s hard earned money, their attitude tends to change. Most people are cool with disputing a lost blender via chat, but a $350 discrepancy in their checking account… well, I need to look into the eyes of the person that wronged me.
The simple point of it is that nearly everything in our life has moved entirely to a digital landscape, so it shouldn’t be much of a surprise that this is where your bank is heading as well. While not fully baked, the technology and security is almost there. Give it 40 years and you will be telling your kids about how when you were their age, you had to use a phone line to get on the internet, people actually drove their own cars, and you had to stand in line to deposit this piece of paper we actually used to denote how attractive you were to the opposite sex…although, I don’t think that very last part will change too much..