Mobile Transaction VolumeBIIVenmo, owned by eBay's PayPal unit, already channels as much volume in total dollar value of transactions as Starbucks' successful mobile payment app, according to our estimates. It has taken Venmo less than two years to achieve the same volume as Starbucks. 

We're regular users of Venmo. Here's a look at how it works and why it's seeing such a fast rise in adoption.

VENMO IS A MORE MOBILE-FRIENDLY VERSION OF PAYPAL: Venmo allows users to easily send money back-and-forth to one another for expenses like rent, restaurant and bar checks, and event tickets. Venmo is free to use and appears to be gaining the most traction with U.S. smartphone users in their late teens and twenties. It's very popular on college campuses. 

We believe Venmo and peer-to-peer payment apps like it will become the most popular and widely adopted form of mobile-based payments. Rather than using a phone to pay at a checkout register in a physical store, which requires phone apps and register systems to be compatible, peer-to-peer payments only require that the two people involved in the transaction have accounts they link to the service during the initial setup. 

Screenshot_2014 06 04 13 59 08BII screenshot of VenmoVENMO IS EASY TO USE: First, you enter your debit card number (or credit card number, although credit card-powered payments carry a fee). The entry of the debit card number is the hardest part in the whole process. Next, you just type in the first few letters of a friend's name in the Venmo app.

I recently sent cash to a friend entering the first few letters of his name in the appropriate field. (See image, right.) The contact info pops up [...]