Before Venmo is able to develop a strategy in order to operate in the United Kingdom, they are required to consider the cost pressure and the pressures for local responsiveness. Venmo must take into consideration these pressures that arise and come up with solutions to address the pressure. For cost pressures, Venmo must figure out a way to minimize costs. In the other hand, in order to address pressures for local responsiveness, the company must have to take into consideration local demands and customs, and find a way to differentiate from their competitors. All in all, Venmo doesn’t really have to worry too much about the pressures being a nuisance as they appear to be low for both costs and local responsiveness.
As Venmo enters a new market to begin their international presence, the first aspect they will have to encounter is costs and any pressures that come along with it. Fortunately, in the terms of cost, the company will be entering a UK market that is already familiar with Peer-to-Peer transaction services, commonly known as P2P services. According to Matthew Hughes, of Thenextweb.com, he states that “[P2P] has existed for nearly ten years” in the UK; this can be beneficial for Venmo if they want to keep their costs down because they know their consumers are used to these types of services, so the company will not have to invest in changes or adjustments that will arise. (TheNextweb.com) Venmo will have to simply keep its basic format and release into the UK market without any pressure of struggling to deal with costs of completely changing their format.
Another cost pressure they have to consider is how they will deal with function costs, especially with customer service. Venmo currently has its offices set up in the US and caters to them from their headquarters. However, they are barely able to keep up with the demand of customers and consumers that reach out to the company with any questions, comments, or concerns. According to an article written by Lauren Gensler of Forbes.com, Venmo is just barely hanging in with the high volume of customer service requests they receive as there is also a lack of employees. (Gensler) With the idea of Venmo offering their service to the UK, they must also be able to deal with the influx of people that will also need customer service. In order to address this problem, Venmo can keep lost low by not setting up a direct customer support line in the UK and consider these two options: Expand personnel in the US or move their services to a low wage country.
Venmo can avoid a good amount of their costs if they opt to continue to operate its UK services from the US, that is, offering customer support from the same offices in the US and not worry about starting up new offices in the UK. Since there is a shortage of staff already, they will be required to hire more staff. (Gensler) In this case, with the new and current employees, they will have to train them to be able to cater to UK customers. Just this idea sounds like a cost pressure, so therefore there is another alternative Venmo can take by simply setting up ground in a low wage country. Many companies in the US have taken this approach with both domestic and international customers by setting customer support center in countries that have low wages. It being a low wage country, Venmo will be able to hire more individuals and in turn deal with the higher volume of people. Through both options, Venmo will be given the opportunity to keep costs pressures minimized.
The idea is for Venmo to launching as an app, which will only carry minimal cost pressure of prices going up is that they will have to deal with a new app store and pay any of the fees that may arise, but in Venmo’s case they can easily cover this through revenue and will not make a major dent. However, a problem does arise for Venmo for the fact that it is an application, and it’s that it must manage to keep prices low. As an application, Venmo makes it available for free for US consumers already, and will expect to do the same when they implement in the UK app stores. As Venmo will be entering a market that is already filled with a diverse selection of P2P apps and services, it has to acknowledge the fact that all companies have a common goal of keeping their apps free. Venmo, just as like as its competitors like Paym or Circle Pay, will face a cost pressure of offering as many services as possible, but still being able to keep costs low enough to continue offering it for free. This is where Venmo will have to begin to consider pressures for local responsiveness.
Venmo has to stand out from the competition and make itself unique in order to deal with pressure for local responsiveness. When dealing with local responsiveness, it will become clear that there is a low amount of pressures. As mentioned beforehand, there is already a presence of P2P transaction services available in the UK, and it has been offered there for quite a while. Matthew Hughes states that the “service is present in virtually all day-to-day bank accounts”, that is, P2P is not a new concept and is always available to bank account holder regardless if they require it or not. Venmo has to address this by making itself unique from the rest of competition and prove it’s a better option than what the traditional banks offer. Venmo will also be required to adapt to techniques its competitors have already implemented in the UK market.
Many UK consumers tend to choose to do transfers directly through the services their bank offers as it may seem as a more reliable option as compared to other applications or services already offered. Venmo can tackle this pressure by reminding consumers that they are a subsidiary of PayPal. PayPal already has a presence in the UK and has managed to make itself as a safe and reliable company when operating there through other acquisitions and services. An insight of PayPal’s presence is offered by Adam Levy, writer for The Motley Fool, as he mentions that PayPal recently acquired iZettle, an in-store payments services provider and in turn PayPal was able to benefit since “iZettle will provide a greater presence for PayPal in stores and in Europe [including the UK]”. (Levy) Venmo can benefit through PayPal’s presence and strength by mentioning PayPal to consumers and show its relationship. The UK consumers will tie in together both companies, which will effectively begin to view Venmo as a reliable company as well; in the long run Venmo will begin to grow and will eventually not require the relationship to PayPal to continue being mentioned as it will have been able to create its own trust with consumers.
Another way Venmo can overcome pressures for local responsiveness is by showing people its social media aspect of sharing money. Current competitors, like Paym which is a very popular in the UK, allow users to share money via a phone number or exchanging bank information. Venmo is unique for the fact that it works almost as a social media platform as well as sharing money. Users are able to view and share transactions with their friends by sharing directly through the app or by allowing them to link their social media accounts, such as Facebook or Twitter. Users are also able to send or receive money through friends they have through these social media accounts. This ability allows Venmo to target a whole new market of people as it will be available through other platforms. According to data gathered by Statista.com, just in the UK there are over 39 million social media users. (Statista.com) This serves as a perfect opportunity for Venmo to capture a large group of people by simply linking themselves with social media.
With addressing cost pressures and pressures for local responsiveness, many factors are taken into play to grasp what steps Venmo will want to take. Venmo is now able to come to a conclusion as to which strategies will work best for the company. As it looks to expand into the UK, Venmo can use the pressures to get a better idea of which strategy will set the company up for better success.