Shopping can be a tough experience. Between receipt-less, cashless transactions and the inability to track purchases, it’s a challenge for even the most enthusiastic consumer. In an attempt to offer up an alternative to cash, a couple of products were developed based on the principles of cashless payments. While these two approaches have drastically different features, they share a basic underpinning – the fact that there’s a transaction that needs to happen.
For this reason, one can argue that products like Venmo and mobile point-of-sale (mPOS) solutions offer two distinct approaches to the cashless payments. A review of these devices will give you a closer look at the two approaches.
Venmo is a nationwide peer-to-peer money transfer service that allows people to pay each other using your debit or credit card. The value of the money transferred is not kept in an account and is transferred as cash to the recipient. It’s like paying someone cash, but without the hassle of documenting it.
On the other hand, there’s no documentation, just a low-level transaction that needs to take place, which doesn’t hurt but does add a layer of challenge. Another hiccup comes into play when gifts are associated with Venmo transactions. If you don’t ask your recipient to pay you back, what’s the point? The reward is the novelty of the associated cash or gift card.
There are a number of challenges with these Venmo alternatives. First, you have to justify the value of the gift and stay away from promotional offers. Secondly, with the ease of integrating into the busy payment networks of the big banks, there are very few outstanding hurdles for others to follow.
Digital-only bank: Pay With Square CashApp
Square also offers a peer-to-peer payment solution. Instead of a software client within an e-commerce website, CashApp works offline by incorporating the hardware and software of the reader. Square offers three different customer acquisition packages with varying monthly rates, but the bottom line is that it gives you the ability to let each other pay in an even less cumbersome fashion.
Besides big name companies, users in certain areas of the country can take advantage of Square payments for cashing into a separate savings account. When you use the app, the Square Payroll will approve for you to earn the extra funds with your regular paycheck. From there, you can use the funds to buy a gift card that can be used anywhere.
Since Square is not a broad platform to integrate into your regular banking system, it’s a better alternative than Venmo if you want to pay someone in cash. While most are incentivized by a cash gift card, a number of user’s are actually earning interest without any bank account.
Both Square and Venmo create a new dynamic in the payment app space. Instead of being connected to a financial institution or accounting system, either of these apps provide a new way to let people pay each other via mobile payments without the hassle of documentation.