Global fintech and funding innovation ecosystem

Why digital donations through Venmo and Cash App have exploded during the pandemic

Fast Company | Jenna Drenten  | Oct 27, 2020

photooo 300x169 - Why digital donations through Venmo and Cash App have exploded during the pandemic      A college student pleading for grocery money. A driver in need of an unexpected car repair. A worker out of a job because of the COVID-19 pandemic. A single mom who needs to pay the internet bill to support her kids’ distance learning.

In all of these cases, people turned to Twitter to ask for financial support during the pandemic. Not thousands of dollars. Just a few bucks. Whatever online followers could spare.

The uptick in these requests on Twitter, TikTok, and Instagram, which are made possible by the growing popularity of peer-to-peer payment platforms like PayPal, Venmo, Cash App, and Zelle.

See: Digital Financial Inclusion in the Times of COVID-19

Digital handouts on social media that help people make everyday ends meet point to the power and generosity of online communities. At the same time, they represent yet another sign that there are deep holes in America’s social safety net.

In America, asking strangers for money has long been stigmatized. In England, during the 16th and 17th centuries, the begging poor were criminalized, with poverty portrayed as a moral failing caused by lack of industriousness.

These ideals of industriousness were shipped to the United States and repackaged as the “American dream,” the credo that anyone with pluck can pull themselves up by their bootstraps.

For these reasons, the stitching together of a social safety net has been a fraught political enterprise, with starts, stops, and backsliding through the decades. People in need are often forced to turn to churches, family, and the generosity of strangers.

The internet gave way to new ways of asking for money, most notably with the rise in crowdfunding, the practice of pooling donations from a large number of individuals. Through crowdfunding, people who may not have had access to financial resources can raise money for healthcare treatmentsadoptionscollege tuitionracial justice, and other causes.

See: How crowdfunding is supporting Black livelihoods and communities

 Peer-to-peer payment platforms like PayPal, Venmo, Cash App, and Zelle have made it even easier to ask for and receive cash assistance.

Friends can split dinner bills using mobile apps, and roommates can use it to pay rent. But these apps have also given rise to a growing cultural trend: asking complete strangers for money via social media.

The process is simple. Write a social media post about a financial need. Include details for your preferred peer-to-peer payment platform: a $Cashtag on Cash App, a username for Venmo, a custom PayPal.Me link. Share the post. Within a few clicks, a stranger can stumble upon your post and complete the requested cash transfer.

By design, peer-to-peer payment platforms remove fees incurred through credit card donations or more formal crowdfunding websites. The full donation goes directly and instantly to the person in need.

In traditional crowdfunding, the financial goals are lofty, sometimes in the hundreds of thousands of dollars. Crowdfunders create formal campaigns with detailed explanations of why they are raising money, how the money will be used, and who will benefit. Progress toward a financial goal is tracked publicly. In contrast, social media-based solicitations allow for smaller, one-time requests, like covering a utility bill. It’s akin to spotting a stranger a few bucks.

See: Crowdfunding: Fundamental Cases, Facts, and Insights

With a steady stream of financial requests coming through social media, individual donors can act as a dam for individuals to survive.

During the coronavirus outbreak, people flocked to traditional crowdfunding websites like GoFundMe to try to save their businesses or cover healthcare costs. For many, living paycheck to paycheck has been transformed into living Venmo to Venmo. It would be easy to classify the rise in requests for digital handouts on social media as just another iteration of the “begging poor”—bringing to mind all the morality myths and stigmas surrounding poverty.

But it’s bigger than that. The pandemic has revealed gaps in the social safety net, and the reliance on digital handouts is a microcosm of the financial uncertainty facing Americans.


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NCFA Jan 2018 resize - Why digital donations through Venmo and Cash App have exploded during the pandemic The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

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