The New Way to Transfer Money to Friends & Businesses
By: Andrew Rosen, CFP®, CEP®

A few years ago my brother owed me money for some wine. I said to him, “Hey man, just send it to me by Paypal.”

He said, “Paypal?  I only have Venmo. What is your Venmo info?”  I responded, “Venmo?  I only have Paypal. Who doesn’t have Paypal?”

Needless to say, this carried on for the next five minutes. We were basically speaking different languages.  I’ve since learned, Venmo is popular with the younger generation.  Paypal, it seems, is for us old farts.  Since that day, my brother and I have both downloaded and continue to use both services.

It sure was a wake-up call.

Flash forward to the present!  During a recent conversation with one of my executive clients (an age 50+ gentleman), I nonchalantly suggested he could pay us by check or Paypal.  He stopped dead in his tracks and said, “Paypal what the heck is that?”  This is a successful, savvy, high level executive; I assumed he was well aware of these payment companies.  Nevertheless, I was suddenly having flashbacks to that conversation with my brother speaking different technology languages.  Right then and there I realized there is a lack of education (a divide even) on how the old school and the new school utilize technology and money.

I recognize there are tons of apps/services that make handling money easier.  I hesitate to talk about them all as it can be sensory overload.  But, I certainly think Venmo and Paypal warrant a discussion, as they are the clear leaders in this space.  No more will you ask “what is it?” or “how does it work?”

I now present to you the basics and practical uses of Venmo and Paypal.

What is Venmo/Paypal?

What most people don’t realize is that Paypal was founded by Elon Musk (yes the Tesla guy), was sold to EBAY, who then spun off as its own entity in 2015, and now owns Venmo.  These companies are an online payment system which allow easy money transfers to and from individuals and businesses.  They make exchanging money extremely user-friendly. I know for some folks this goes against a core belief of “always have cash.”   Trust me though, this is super useful.

As I describe all this, I can only think about my Dad in my high school years.  He’d always yell at me for not having any cash on hand.  “Dad, what the heck do I need cash for?”

His response, “What if your car breaks down in the middle of the night?  You need cash to pay the tow truck driver!”  Those days my response was “credit card,” or “debit card.”  Today, the response is to just Paypal the guy!

Both of these companies have easy-to-use smart phone apps, and online websites.  (The website is available for those of you whom still use a flip phone!)

How it works.

It’s quite simple.  Either download the app or go to their website: or  From there you create a secure online profile in a matter of minutes.  You’ll need a username, password, a cell phone number, email address, and connection to a checking account.  They’ll do a test deposit, generally.  Then, you’re off to the races!

Once established, you have two basic functionalities.  First, you can send money to anyone’s account just by knowing their username, phone number, or email address.  Second, you can request money from someone. The system sends them a link.  They click on it and transfer money from their account to yours — think of it like a mobile invoice.  Whether sending or receiving money, if you don’t have dollars in your Paypal or Venmo account, it will just take a day or two for the money to be processed. Voila, money magically appears.

Practical Use.

“If it ain’t broke, why fix it?”

I’m sure many of you old schoolers are thinking, why use this?  Well if you ever expect to receive or give money to someone under age 40, you’ll need to get with the times.  You could of course write a check, mail it, wait for it to get deposited and then the funds arrive.  Or, in literally 15 seconds you can login, click your friend’s info, select the dollar amount, and hit send.  Boom! You’ve got mail (or a bunch of money).

Let me give you a real life example.  My wife, Jess, and I were out on a date night with our good friends.  On the way home, we realized we had no cash to pay the babysitter. (I know, I can hear my Dad’s ‘I told you so,’ too).  I told Jess not to worry; I’ll just Paypal her.  Sure enough I sent the babysitting money in 30 seconds once we got home.  I didn’t need to worry about having the right amount of change, or rounding up or down.  I just paid her and went to bed.

Why you can’t live without it.

In my estimation this is the next big shift in the way we handle money exchanges.  Once upon a time, no one used credit cards and now my wallet is packed. (I could give George Costanza from Seinfeld a run for his money.)  Heck, there are stores these days that literally don’t accept cash anymore.

In fact, Amazon just announced they plan to open 3,000 cashierless stores by 2021!  That’s right — 3,000 stores from the global retail giant that won’t have a man or woman working a register.  It is only fair to surmise you’d better find a way to pay digitally and credit cards aren’t for everyone.

Venmo or Paypal?

I often get asked which of the two services I like best, Venmo or Paypal?  Everyone has their preferences.  By now, you already know my brother’s favorite.  I mean, both services do virtually the same thing.  In my extremely high level analysis, Venmo seems to be more adapted by the “younger” generation as it has a form of social element.  Paypal may not be as sexy, but it resonates with the older generation a little more.

I have both and use whichever the person I’m sending money to prefers.  Naturally, when sending to my brother, it’s Venmo.   But, when sending to my mom, I’m using Paypal (which I made her download about two months ago).

The future is now!

Hopefully this article has helped with understanding these two examples of money transferring technologies.  I’m a firm believer the mobile exchange of cash is a real disruptor for the betterment of our society.

The world is your oyster my friends; let the mobile transfer of money embark. If you haven’t done so already, go give it a try.

If you really want, I’ll even gladly give you my username so you can test out sending money to yours truly. Oh and I now accept both Paypal and Venmo 🙂 !

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Andrew Rosen

In his role as Financial Planner, Andrew forges lifelong relationships with clients.  He coaches them through all stages of life and guides them to better achieve their life goals.  For more information about Andrew or the other firm partners, Kyle Hill and David Levy, click the link below.

Find out more about Andrew Rosen, CFP®, CEP®
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Find out more about David Levy, CFP®

Financial planning and Investment advisory services offered through Diversified Financial Consultants, LLC, a registered investment advisor. Securities offered through Securities Service Network, LLC, Member FINRASIPC .  Associates of Diversified Financial Consultants are registered representatives of Securities Service Network, LLC, a registered broker/dealer, 9729 Cogdill Road, Knoxville, TN 37932. (800) 264-5499.