Inflation Is Seeing More People Turn To Payment Apps

For years, people have felt the need to try and save money where they can to ensure they always have enough to live. However, things have gotten significantly tougher recently, what with high inflation being such a problem. The issue is now so serious that some people are apparently leaning on their loved ones for all sorts of help.

This includes sending payment requests to split major costs, such as bills and groceries, as well as plenty of smaller things. They’re doing this via apps like Venmo and Cash App, and it seems it’s quite a sizable percentage of people asking for money. Is this something that’s only going to continue as inflation continues to be a problem?

Inflation has grown significantly, but wages haven’t risen with it

Money isn’t everything. However, in a world where you have to pay to live, it’s hard not to want more of it. That’s especially the case for the millions of people who are struggling to get by with what they’re currently earning. Even some of those who used to have no problem with this are now facing difficulties because inflation has become such a problem. According to the Labor Department, consumer prices in December were 6.5% higher than where they were at the same time in 2021. The cost of living seems to have become incredibly expensive, but wages haven’t risen in line with that. So, many people are resorting to desperate measures to ensure they have enough to get by.

Asking for money from loved ones is becoming more popular

When someone needs money urgently, there are several options at their disposal. One of these is to apply for a loan. However, success isn’t always guaranteed with this, nor is it free money. People are expected to pay a loan back, usually with interest. Another option is to turn to friends and family members who might be in a better financial position. It can be very hard to ask for money from someone you care about, with some people refusing to do it because of their pride. However, it seems to have now become quite a popular route for sourcing money. It helps that payment apps exist that allow you to send or request cash from people you know. Are people taking their financial requests too far on these apps, though?

“Petty” requests for small amounts of money are growing

It’s hard to define how much is a reasonable amount of money to ask a friend or family member to send. It depends on your financial situation, their financial situation, and also if they have any involvement in why you need the money. Surprisingly, though, the issue some people seem to be having isn’t that their loved ones are requesting too much of them. Instead, it’s that they keep making “petty” requests. According to an online survey of 1,000 US adults, around two-fifths of young adults have received these requests. 86% of those surveyed agreed that a “petty” request amounted to under $5, with around 25% receiving them regularly. Presumably, people are asking for help to split their small payments because of inflation. However, is it possible that some payments are too small to justify needing assistance with?

Many respondents seek help for payments like rent, groceries, and restaurant tabs

Of course, this isn’t all that people are using payment apps for. Around 60% of the 18 to 25-year-olds surveyed said they use them to split bills, while 58% of the 26 to 41-year-olds said the same thing. Plenty of them have reportedly begun doing this because of inflation, with 53% of the first age range and 50% of the second admitting as much. Overall, almost half of all respondents said they’re using apps like Venmo to split costs in ways they normally wouldn’t. Unfortunately, the significant rise in inflation has forced them to seek help from friends and families. Rent, groceries, and restaurant tabs reportedly form the leading purchases that US adults request help for on these apps. Moreover, for millennials, gas is something that 37% of respondents also request money for.

Payment apps have seen significant growth because of inflation

Over the last two years, Venmo has reportedly seen an 85% uptick in monthly active users. Meanwhile, Cash App recorded $774 million of gross profit in 2022’s third quarter, more than a 50% increase from the same period in 2021. Inflation is reportedly primarily responsible for this growth, with people seeking financial solutions where they can find them. With inflation likely to drop anytime soon, the reliance on these apps is bound to continue. However, with people already unimpressed with “petty” requests, users may have to think carefully about how much money they ask for when splitting the price of purchases. Otherwise, they risk alienating the people they currently rely on for help.

It’s good that people have payment apps to help with funds when money is tight. However, we’d probably all rather have lower inflation than a means of getting cash from someone else who may also be facing financial trouble.