I'm not even sure why Venmo caught on, it is the worst option out of all the possible payment systems (fb, Google pay, sq cash...) since they don't deposit cash received into your bank account and rather hold it interest free.
* Venmo launched the first out of all the systems you mentioned
* Venmo was one of the few (maybe only) system that allows you to pay users who are not on their system. Say you need to pay Joe and you were a Venmo user but Joe wasn't. You could still "pay" them on venmo and they would get a text back saying if they signed up they would get the payment. No one else did this well when they launched
* Venmo integrated with facebook so many of the people I needed to pay were already in the system
* Venmo was the first free system to use
* Venmo was the first mobile friendly system to use. It was the first major system where I could split the bill real time at a restaurant
* Venmo paid early adopters to join (I think I received $2 to make my first payment)
It seems like a clear case of first mover advantage. I'm sure the systems you mentioned are now better, but at the time Venmo had the best UX and now that everyone I need to pay is on it, why would I switch? The few cents of interest loss I lose every year isn't worth finding out if everyone I need to pay is on one of the alternative systems.
If someone "paid" me this way, there would be issues.
My primary concern with Venmo holding the cash is that I'd much rather have my bank in charge of it than some other random entity - The fact that it's now Paypal-owned doesn't help either
If i'm sitting in a restaurant with friends, I'm not going to ask each of them for their email/paypal IDs so I can charge them when you can already get that info in venmo.
* Paypal did not integrate with facebook (does it even do that now?) so I would have to manually ask each person for their paypal id. Not fun for casual dinners with new friends
* Paypal was not free (they charged for debit or credit)
* Paypal did not have a good mobile UX
I remember this because the reason I adopted Venmo was because my roommates were searching for a solution to split rent and we looked at Paypal and ended up choosing Venmo. Then I started using it for social activities (restaurants, taxis, bars, etc.) and became an active user. I actually have had Paypal since the ebay days, but I never use it.
I use Venmo exclusively for sending money to girls from Tinder. If you look at my stream, you’ll see transactions sending money to tons of babes, often with suggestive comments. Other girls sometimes see this, and decide they too want in on the action.
Pretty great what giving out some dollars on the internet can do for your rep. For a developer making six figures in Silicon Valley, it should be no big deal at all.