‘Ven’ or ‘Venmo’? Freelancers score an edge over banks
Part 3 of a three part series on virtual cash
Financial services have their own set of challenges where digital is concerned, but can also make ideal believable brands. That’s because consumers increasingly meet financial brands in the same (digital) places they transact with them. Digital becomes both the messaging and service platform in one, meaning that product and brand approach sameness.
That’s why our series on trends in virtual cash started with Facebook Credits, which launched almost two years ago as a currency and payment platform to drive sales of virtual goods. In the second post, we examined PayPal’s intention to move from primarily a replacement for credit cards for eCommerce into the peer-to-peer payments world, to varied success. In this final post of the series, we look at an emerging model for virtual commerce: “do-it-yourself” cash.
To begin to understand this movement, consider a freelancer in Canada who has a skill required by a small agency in Hong Kong. In today’s world, payment for services would involve exchange rates, awkward bank transfers and days of wait for clearing. Not to mention central banks who can trash the value of cash in your pocket. Anyone tracking the Euro/Dollar rate of late?
Some claim money is a just figment of the imagination (“it’s just a piece of plastic in your wallet” says MasterCard). Money is imbued with value by our common desire for stuff, and humankind’s love of trade. Oh, and a certain amount of scarcity is also key.
So why not protect your interests and issue your own currency? Like-minded tribes of freelancers are doing just this – they share a common desire to trade services and goods they craft, and to have payments flow quickly and without obstacles.
- This winter, OurGoods, a New York community bartering network, is running a night school that offers adult continuing education to students in exchange for barter items the teacher might want. Take an improv class in exchange for family recipies, or learn to sing in exchange for a set of tires.
- This spring, Venmo launched as a personal network and platform to share money and simplify the way you pay for things. It’s a networks based on “trust” you have with the people you know, so you never have to think about paying someone back again.
- Swapits, launched in the UK, offer a flexible exchange for stuff, backed by a currency of the same name. You get Swapits “every time you swap something” with another member, and can earn extra Swapits through special offers, offering to do things for other members online, or entering competitions. Accrue enough Swapits and soon you can buy more stuff.
- The digerati make flexible payments and exchanges outside of the command-and-control system of traditional currencies and payment platforms. So it’s no surprise they are inventing social currencies like the “Ven” to trade knowledge digitally across places like Hubculture, a “post-national online social network” for independent collaboration and payment outside of traditional economic platforms. According to its web site, HubCulture is a social network service that is “the first to merge online and physical world environments.” And according to Wikipedia: “As of February 2010, HubCulture lists over 20,000 members and has exchanged over 1.6 million units of its virtual currency, Ven.”
“Do it Yourself” currencies aren’t new. Local scrip issued by towns in financial distress helped out during the recession when short supplies of cash further depressed already bad times. But now in the rebound, maybe cash is just too much trouble. Commerce, a cash-free restaurant, launched here in New York last year.
The emerging model for virtual cash encourages peer-to-peer exchanges of “do-it-yourself” currency backed by the shared trust and credibility of small groups with common skills or interests. To LBi, the era of the wallet-less “cash hater” has arrived.
-Craig Konieczko and Hevan Chan
