Venmo is a U.S. based mobile payment service that allows users to easily send, request, and receive money, acting as a digital wallet that links to users’ bank accounts and/or credit cards. While owned by PayPal Inc., Venmo differs from PayPal in that it is tailored for less-formal transactions between casual acquaintances, friends, family, authorized businesses, and other interpersonal connections. It also features a social media component which we will discuss further below.
The service offers digital-commerce convenience for the near 90 million active user base in the United States, 68% of whom are Gen Z and Millennials. However, as with any other smartphone application there is public concern regarding safety. Most individuals who come online to search “is Venmo safe?” are asking about potential threats to data privacy and cybersecurity, but there is another wellness element that we are asking the millions of users to consider, namely those who are vulnerable to addictive behavior. Read ahead to learn more.
Brief Overview of Potential Behavioral and Mental Health Risks of Using Venmo for Vulnerable Americans
Unhealthy Behavior with Microtransactions
Venmo is heavily based on microtransactions, both in terms of its user experience (UX) and as a business model. While the popular peer-to-peer (P2P) payment app can be used for large transactions (e.g. paying rent) its core growth and social functionality strategy thrives on small, frequent payments. Common Venmo uses include splitting the bill on dinner with friends, sending a loved one $5 for coffee, or buying something from a vendor at a local farmers/artisan market, et cetera. It is even becoming increasingly common for the underprivileged to request this manner of payment on panhandling signs, with “spare change?” being accompanied by a Venmo ID. Additionally, there is a phenomenon related to spontaneously gifting money to strangers. In certain cities (Las Vegas, Nashville, Atlantic City, Miami, etc.) a surprising number of people celebrating a milestone birthday, bachelor/stagette party, or honeymoon scribble requests for Venmo donations on their vehicles and t-shirts. It’s a polarizing trend, with some viewing it as a modern, fun way to ask for and accept cash gifts, while others deem it tacky. Interestingly, it works, due in part to the seamless and addictive nature of microtransactions. Researchers confirm that microtransactions are addictive because they leverage psychological principles such as variable rewards and even social/peer pressure when it comes to certain digital platforms. They help create a cycle of impulsive spending that is driven by the release of dopamine.
Many are familiar with the dopamine connection as it relates to personal purchases (i.e. the “shopper’s high”) and so it’s easy to see how Venmo microtransactions can be problematic for someone who is vulnerable to unhealthy shopping behavior. Meanwhile, Venmo is also an accepted form of payment for legal sports betting and online trading in the U.S. for both deposits and withdrawals. Most regulated online sportsbooks and prediction market platforms allow users to connect their Venmo accounts, with microtransactions feeding the release of dopamine and promoting unhealthy betting behavior among vulnerable individuals. The National Collegiate Athletic Association (NCAA) has even recognized this, which relates to their inclusion of a Venmo Best Practices Guide for student athletes within their recent (March 2026) Draw the Line Against Sports Betting Abuse and Harassment program. Venmo is also accepted by popular video game mobile-web-stores where skins (associated with gambling behavior) can be purchased with ease. It’s important to note that dopamine is also produced when someone uses Venmo to send monetary gifts. Charitable giving triggers a potent, biologically rooted, feel-good response which is fundamentally linked to the brain’s dopamine-driven reward system. This neurological reaction is similar to those triggered by activities like those listed above (online shopping, gambling, and gaming) which potentially makes the sensation addictive. For a compromised individual, the release of dopamine becomes diluted over time and requires greater frequency and/or volume to sustain the same feeling. From there, habitual, impulsive, or compulsive behavior may be formed.
Ultimately, Venmo serves as a prominent example of microtransactions in the context of peer-to-peer (P2P) payments and social-driven digital commerce. Click here to learn more about addictive behaviors relating to microtransactions for greater awareness about regarding your own use of Venmo and related platforms.
The Social Component
“The high level of social sharing of Venmo amongst friends was seen by journalists to affect rapid user growth. We believe the high levels of sociality in Venmo impacts users’ behaviors. The embedding of social features such as likes, friend lists, and emoji into Venmo’s payment platform likely played a key role in increasing their active users and boosted rapid development.” (Science Direct)
Venmo has integrated a social media feed on the platform. It is a public, Facebook-style activity stream within the payment app that displays users’ transaction notes, emojis, and participants (sender/receiver). While payment amounts are hidden, the feed defaults to a public setting, allowing friends or anyone else (unless privacy tools are adjusted) to view social interactions-transactions such as payments made for shopping, dinner, drinks, concert tickets, monetary gifts, gaming, gambling, and more.
As with any social media feed, Venmo’s can promote addictive behavior because it turns otherwise mundane financial transactions into a socially voyeuristic and gamified experience. It fuels curiosity through “transaction stalking” and provides a continuous stream of social data about friends, acquaintances, former romantic partners, and the like. As with traditional social media, the feed acts as a constant stream of variable content that triggers a dopamine release in the brain’s reward pathway when users observe surprising or interesting transactions. It may also foster a fear of missing out (FOMO) and need for social validation, which can cause anxiety about being left out of events or cause curiosity about shared experiences, driving further scrolling. It may also encourage unhealthy spending behavior in order to “keep up” with what others are doing.
Who May Be Vulnerable?
Given that Venmo combines digital-commerce related to complex online consumption behaviors with key components of social networking, those who have vulnerabilities to any of the following (which often cooccur with one another) should be more mindful of their behavior on the app, and others like it:
| Anxiety | Depression |
| ADHD | Bipolar Disorder |
| OCD | PTSD |
| Compulsive Shopping Disorder | Problem Gambling |
| Unhealthy Social Media Use | Unhealthy Gaming |
The risk of addictive and unhealthy behaviors and dependencies continues to grow as the Internet-of-Things delivers new technologies to the masses. Whether recognizing a behavioral or mental health issue related to the use of Venmo or some other web-enabled platform, Kindbridge is here for you. Reach out via the contacts provided below to develop the skills needed for healthier online behavior.
Other Articles You May be Interested In: