Why would we make our financial practices public?

Imagine a world in which every time you pay a friend back for a meal you shared, all your friends—and even more strangers—know about it. Welcome to the world of Venmo, the Paypal-owned mobile payment service that allows users in the USA to split bills, pay rent, and pay merchants. 

Venmo also includes a social media feed of transactions that is public by default: users who don’t want everyone to see how much they have paid to whom and for what need to switch their feed to ‘friends only’ or ‘private’. Transactions are meant to be seen: as Swartz puts it, “Venmo is not a wallet; it is a conversation.” And no matter whether we pay with Venmo, a watch, a card, or cash, we communicate our identities through the way we pay.

The payments app has been around since 2012 and has at least 80 million active users, so most people in the USA are probably familiar with how it works. But while I have known for a long time that Venmo allows people to pay each other back, I had no idea that repayments were done so publicly. 

It was thanks to media scholar Lana Swarts that I was enlightened. Venmo is one of the cases she discusses in her book New Money: How Payment Became Social Media (2020, Yale University Press). As well as providing a history of different forms of payments in the USA, she talks at length about how payments are changing. 

Swartz’s main argument is that payment and social media forms are converging, and that this is altering the ways we communicate about money—and compelling some of us to be more public with money than ever before. People are increasingly doing payments in publicly visible ways, and payment companies are using social media to monitor buyers and sellers who might present a high risk of defaulting on their obligations or acting against company policies.

To me, Venmo is emblematic of the book’s title: in this case, payments and social media really are converging. A Venmo user can browse the transactional lives of others: where their friends ate, who they hung around with, who was shopping where, and so on. 

Like Instagram, it can be used as a vehicle of social performance, such as when someone posts to show off a visit to a fancy restaurant. 

It can be used to build relationships, such as by sending someone you love a small amount of money to show that you’re thinking of them. 

And it can be used for fun, such as when people deliberately mislabel transactions to amuse their friends. 

But, as you can imagine, Venmo has also led to distressing situations. Some users have found out that their ex is in a new relationship by seeing their posts about having dinner with their new love. And since Venmo transactions are public by default, not everybody who has shared their transaction data publicly realizes straight away that they are doing so. 

As an Australian living in Europe, I find the idea of making transactions public shocking. While there have always been people who are happy to flash cash, money is usually considered to be an intensely private matter, to be shared only with close family and financial advisors. 

This is true of digital money as much as cash. In Kenya, for example, receiving remittances via mobile money rather than through a face-to-face agent makes it easier for people to hide the fact that they have money. Also in Kenya, media researchers found that women in Kenya used mobile money accounts to hide the remittances they receive from their husbands. And, according to the World Bank, digital loans can also help people avoid the stigma that may arise from being continually seen at a microfinance office (World Bank 2021). 

Interestingly, in a recent conversation, Swartz told me that in recent years, more and more Venmo users have been making their transactions private. It appears that a series of public articles on Venmo privacy and the exposure of high-profile people, including Buzzfeed finding Jo Biden’s account, have made people aware of just how much data they are sharing—and why it might be a bad idea. 

Thus trends are not unidirectional: people may be more or less private with their money depending on many factors, including whether they trust a service, to what extent they feel they are protected, and public trends. The growing popularity of Decentralized Finance (DeFi) services built on blockchain demonstrates that people are interested in keeping their information private. 

And yet financial services like cryptocurrency are not quite as private as many people think. Transactions are visible, but they are pseudoanonymous, as the authors of a 2013 study showed. The researchers exploited the visibility of Bitcoin flows to cluster and positively identify Bitcoin service providers through applying algorithmic analysis and participating in transactions themselves. This study was a landmark in that it showed that Bitcoin (and presumably other cryptocurrencies) are not quite as private as people would like to think. 

In such a complex field, it is difficult for consumers to ensure that they get privacy right. Given the current trend towards deregulation of technology and payments in the USA, the fact that people are becoming more aware of privacy issues can only be a good thing. Venmo’s experiments in social money have been fascinating, and we have learned a lot from them—but perhaps the rest of the world had the right idea in not following suit.