Society has come a long way since neanderthal bartering. We’ve used animals, shells, and metal coins as a means of negotiating mutual interests. With the discovery of the new world, credit as a means of payment emerged as people bought passage on ships to America by indenturing themselves to several years of servitude.

Since then, paper money has fluctuated in value, causing the rise and fall of national economies. Checks started simply as bills in England in the 17th century, but have evolved to become a major form of payment for personal and business purposes. The internet once again revolutionized payment method in the 1990’s when the first internet purchase, a Pizza Hut pizza, came through in 1994. The early 2000’s saw the rise of e-commerce and the war on cash rages on, but arguably, the biggest shift in the online payments industry could happen in 2017.

The Rise of Online Payments

In 2009, Iqram Magdon-Ismail met up in New York City with his college friend Andrew Kortina, but forgot his wallet. After the cumbersome process of divvying up expenses from their trip, writing a check, cashing that check, and waiting for funds to show up in their accounts, the two agreed that friends should be able to send money to each other without checks or exchanging bank information. Thus, Venmo was born. Suddenly, Venmo revolutionized paying back a friend for the hot dog he or she bought you. The app reduced the cumbersome process from writing a check and taking to the bank to clicking a button (and let’s not forget picking out the appropriate emoji). Venmo, the quintessential millennial standard of monetary exchange, shook up online payments by simplifying and socializing the previously awkward process of settling debts with friends.

use a credit card for online payments to purchase things


Peer to Peer Online Payments

Today, the Peer-to-Peer business model revolution has shaken up the traditional business to consumer model and made a sharing economy: individuals exchange money and services instantly, without large corporations guiding the transactions. Sending money via mobile is disrupting the payments industry as spenders turn to apps such as Venmo to not only pay back friends, but increasingly to make in-store and online payments. The new online payments norm encourages more spend, simplifies transactions, and makes payments social.

Since its inception, Venmo has broken down barriers around payments, making it easier for users to spend money. Previously, people who didn’t use the same bank wouldexchange routing and account numbers and pay a fee to send money or write a check and take it to his or her bank.  By achieving instant and free transfer of funds between friends, Venmo encourages more frequent transactions among a larger network of people.

In true millennial fashion, Venmo not only simplifies payments through technology, but the app also turns exchanging money into a social action. The mobile feed shows users their friends’ spending habits, so friends can see that “Sally paid Harry for coffee” on their feeds. Venmo may capitalize on this feature by incorporating branded content (such as emojis) on the feed in the future. The company first test-launched customized emojis in April 2017 as part of “music festival season” and featured custom icons that celebrated aspects of attending a music festival–everything from palm trees to port-a-potties. Venmo released a statement about the launch encouraging users to venmo each other with the emojis during the festivals.

Part of the custom-emoji release included a call to action encouraging marketing teams to collaborate with venmo to produce brand-customized emojis. As brands customize emojis and partner with venmo to accept online payments, these brands will show up on the feed, driving sales to that vendor. The feed offers transparency between friends and eventual marketing opportunities for companies that allow transactions through venmo.

worker uses online card to make payments on mobile device


The Future of Payments

Consumers are turning to mobile payments at astonishing rates–Venmo is on track to process over $20 billion in payments this year–so there’s no doubt this trend will expand beyond friends to connect businesses, retailers, and banks. Although Venmo only makes mobile payment available to connected mobile retailers, the company plans on connecting with more physical retailers in the future. Previously, Venmo put a cap on monthly transactions, limiting friends to sending only $299 per month; however, this policy has since changed. Users can now send up to $5,000 per month, allowing for much more growth and opportunity for people to eventually make online payments through the app using online cards.

The rise of Venmo and online payments has ignited changes not only in peer-to-peer exchanges, but in commerce as well. Retailers increasingly automate payments and accept physical card alternatives such as Apple Pay or Google’s Android Pay. Online cards allow consumers to generate a card number associated with their accounts, without ever needing to divulge their card or account numbers. (You can find a full explanation of that process here.) New international digital currencies such as bitcoin could mean easier exchanges across nations. One thing is certain, virtualization has changed the way we exchange money and will continue to shape how businesses function in the future.


Although we can’t be certain what the future of the payment industry will look like, we can know that recent technological innovations will shape the way businesses exchange money in the future. Humans are constantly improving methods of “divvying up.” In the last twenty years, payments have matured to online bill pay, online cards, and even digital currency. Reimbursements and expense reports somehow didn’t die with checks, and since that pesky end-of-the-month paperwork somehow survived the virtual revolution, we at Divvy are setting up a guillotine (or just a paper shredder) at every analog accounts payable cubicle in America. Divvy tracks spending in real time, ending hours of combing through expense reports and piles of reimbursement claims. We are turning the future into reality now. That’s why we’ve made business-related expenses as easy as sending money between friends. Raise a glass to freedom, because payments are about to get a lot more of it.

About Divvy

Divvy eliminates expense reports and allows your company to proactively manage your budget. Employees simply swipe a physical “Divvy” card that links directly to the app and immediately records every transaction. This way, your company can monitor budgets in real time, control overspend, and prevent employee fraud. Never collect another receipt, never file another expense report, and never overspend again.

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