Feature Friday: Digital Money Accounting

So this is a different kind of feature friday. It is about a feature I want but don’t have.

Digital money is coming and it is coming pretty fast now. In the developing world we see mpesa taking off in many countries. In some places, like Kenya, it has become the dominant way people conduct their financial lives.

In the US, among the young adult crowd, Venmo is hugely popular. My kids use it for much of their financial lives. The Gotham Gal and I rent a property we own to some young adults and they all pay us rent on Venmo. We, in turn, pay the super we use in the building on Venmo.

And then there is bitcoin. I’m running around with the Coinbase bitcoin wallet on my phone and sending money (dollars or bitcoins) around using the bitcoin protocol.

The problem is these digital money services are a “black hole” when it comes to accounting for all the transactions. I know that I put $500 into my Venmo account last month and I know its all gone. But where did it all go. How much came in and why? And how much went out and why?

I want Mint.com for digital money services, starting with the Venmo and Coinbase mobile apps. That would be super helpful for me and, I suspect, for everyone using these digital money services.

I bet it exists or that it is being built. I just haven’t see it yet. And I want it. Badly.

#hacking finance

Comments (Archived):

  1. andyswan

    I’m guessing 99% of your transactions in $USD are digital already, and the accounting is naturally built into most of the “apps” you use (banking, online bill pay, credit card statements, etc)So really, this has nothing to do with “digital”, and everything to do with new apps not giving you a history of your transactions in an ideal format, or aggregation apps not plugging into the new apps you’re now utilizing. I’ve used Venmo for years… I think the accounting is there, the UI just clunky and hard to navigate.BTW– I’ve said it before and I’ll say it again… the $USD is easily my favorite digital currency.

    1. pointsnfigures

      Gisele prefers Euros. Heh.

      1. andyswan

        Gisele gets what Gisele wants. This is true in any currency at any point in time on any continent.

        1. pointsnfigures

          I just recall her back in 2007 saying she didn’t want USD, but EU currency for her pay.

          1. JimHirshfield

            You speak with her frequently?#pillowtalk

    2. Richard

      Looking at VISA’s share of consumer spending seems to validate this. Transactions up 10% this quarter alone.But to put this in perspective, Visa earned a 1.3 B this quarter, Apple earned 18B!Trending since 1960, It’s has always been the device that accesses your credit that dominats spending.

    3. fredwilson

      i don’t see any accounting features in venmo and i’ve looked

      1. andyswan

        This is what I mean

        1. William Mougayar

          wow..big spender! πŸ™‚

          1. andyswan

            That’s a really nice way of saying “degenerate gambler” lol

    1. William Mougayar

      Splash page looks pretty good. Have you tried it?

    2. fredwilson

      oooh. thanks. i’ve not seen that

      1. Will Pangman

        Hi Fred,I’m Will with Tapeke. Would love to answer any questions and share our slide deck with you πŸ™‚

    3. ZekeV

      the “zero knowledge” aspect of tampeke is very interesting.

  2. Elia Freedman

    There’s a huge trust factor with these kinds of apps that is so hard to overcome. Namely, it is so hard to get users to trust you wish access to their financial data. I’ve had apps like this in mind for years and I can never figure out how to overcome that trust issue.

    1. LE

      I can never figure out how to overcome that trust issue.You don’t have to overcome the trust issue because there are always people who are stupid and naive who will trust you just because you roll out the service and tell them to trust you on your webpage. That’s the way this stuff works.I’ll tell you a funny story. When you deal with people they are all over the map. One person if you say “fax me your credit card” they do it no problem. Other person “I don’t want to fax my credit card” (because they think people are intercepting faxes I guess but they will give you it over the phone). Or you tell people “I need a copy of your drivers license” and almost all will comply (higher rate than credit card numbers what we have found). Some will redact the license number some won’t.

  3. John Rhoads

    I’d like to know my PayPal Balance and Venmo Balance and but coin Balance and eBay Balance and etc too.Furthermore it would be great to know all my subscriptions. Cell phone, gym, audible, car insurance, etc.

  4. pointsnfigures

    Seems like Quicken should be able to build something like that quickly…heh Just kidding of course.

    1. Richard

      Thoughts on the end of floor trading on the CME?

  5. Christopher Conner

    It looks like Mint is already working with Coinbase and the Winklevoss Bitcoin Trust for tracking and budgeting. https://www.mint.com/budget… Surely Intuit is looking at other electronic transaction services for integration as well.

    1. fredwilson

      that’s cool. i did not know that. i wonder if they support venmo

      1. Ryan King

        They do.

  6. Michael Ferrari

    Would be pretty easy for these companies to adopt the OFX protocol so PFM sites like Mint could consume their customer’s transactional data. We did it at my company. I don’t think it would require a complete stand-alone Mint clone to manage digital currency. The benefit of a PFM is to display all your financial info in one place, so it can perform analysis on the whole. Probably something companies like Venmo and Coinbase should put on their roadmap. Getting Mint to consume their OFX feed is pretty simple.

  7. Robert B

    There are a lot of these features in the works. Paybase.com for example that is trying to bring crypto to the masses with the simplicity we all need. BTC and the Winklevoss twins are all over this as well.I have a lot of friends within the 20 – 28 year old range that still do not trust these apps simply because they think their information will be hacked or compromised somehow.

    1. ZekeV

      As well they should be distrustful.

  8. Chris Phenner

    Expensify shared some feature updates that got me thinking about item-level accounting of spending decisions. Expensify and I started our relationship around ‘business expense management,’ but I am finding myself using it increasingly for personal finance.One catch: You need an email receipt (at-minimum) for each transaction, which in turn you can forward to [email protected] (love this feature, like [email protected]).I add a three-to-five-word-long note atop each forward so I remember what I was doing, even that can be a lot as you (for example) arrive at the airport and navigate luggage and kiosk and security lines, but it’s the best way I know to be precise, quickly.And with the personal finance help I imagine Fred has (and needs), someone else could log in and do the ‘longer accounting’ of assigning categories of spending, including marking transactions as (say) tax-deductible or (related to whatever USV Fund vintage).Not perfect, but perhaps Coinbase and Venmo will become ‘Accounts’ that one can integrate with Expensify (Personal Capital is another contender here).

    1. JimHirshfield

      Chris – Try this…Send an email to [email protected] and put something like this in the subject line and the body (I forget which one makes it work; so I put it in both)$5.00 for taxi to Planning MeetingIt will record it correctly as an expense (but no receipt). I think it works with data points in any order.

  9. @mikeriddell62

    What you want is a personal data store combined with a digital wallet. You’ll have to wait for someone you trust with your info and dosh to produce one.

    1. LE

      You’ll have to wait for someone you trust with your infoRight and you can definitely trust them just based on the cute “trust us we’ve got it figured out” things they say on their website.

  10. LaMarEstaba

    You can download your transactions in CSV format. I guess it would be easier for consumers to just have it integrate (OFX protocol) without any kind of action, though.I did look at jobs, just because I find that it’s an indicator of growth. Their job opening for a mobile biz dev manager was ripped off of Braintree, which is sloppy.https://boards.greenhouse.i

  11. Guest

    I was thinking about this accounting service recently when doing my taxes. i wonder if there is like an API sort of system where MINT csnn tap into the individual payment transactions that PayPal and Venmo have. That’s not to far away from the future. Maybe we’ll see it in 2015.

  12. Matt Zagaja

    The other week a friend asked me to pay him back on Venmo and I had an awful onboarding experience. It failed out at the part where I attempted to give it a bank card to use. Very disappointed and haven’t used it since.

  13. Nick F Park

    I totally agree with you. I’m a Venmo, Paypal, Bitcoin user too, but really just for sundry stuff between friends and the little I do on eBay. Here’s a crude hack you could use until tech services catch up to our basic needs:Budget your spending by “Needs” and “Wants”, then use separate services for only Needs or only Wants (e.g. Venmo for Wants and Paypal for Needs). Then at least you have a sense of the basic “Why” of your spending.I go into some depth on the system I use here: http://www.nickfpark.com/budget

    1. fredwilson

      that feels like a lot of work and exactly the kind of thing i don’t want to be doing. i appreciate the suggestion but the very idea of doing what you are doing says to me there is a need for something better

      1. LE

        that feels like a lot of work and exactly the kind of thing i don’t want to be doing. i appreciate the suggestion but the very idea of doing what you are doing says to me there is a need for something betterOr, it could also mean that the need that you have isn’t great enough to justify the effort that is required, right?Look, before there were automated car washes people used buckets and sponges. Before there were electric vacuum cleaners people used brooms. Before there were dish washers people did dishes by hand.In the above examples nobody said “that feels like a lot of work let’s have dirty dishes” they just did the work and then someone came along and found a way to make that work easier.Once again, you want it because it will be cool to look at the end results won’t really matter to you at all when you see them.So really the question here is how many people out there really want and need this type of info?

        1. Nick F Park

          It’s true. I want the features that Fred is talking about for sure––I want far more than that, but I also need a way to make sense of my spending (with as little effort as possible), right now.

          1. Chimpwithcans

            Needs and Wants all over again? πŸ˜‰

          2. Nick F Park

            :^) works for me.

  14. William Mougayar

    Fred, as you know I’ve been watching the space carefully and about to publish something pertaining to it. But here are 2 companies I found in this category. I haven’t used them, but worth checking out:LibraTaxhttp://www.libratax.com/get…BitcoinTaxeshttps://bitcoin.tax/

    1. fredwilson

      thanks. do they support venmo and mpesa?

      1. LibraTax

        No venmo or mpesa (yet). We do have Coinbase. We have a new demo up on our homepage. libratax.comWe are launching Libra Business and Libra Pro in the next couple of weeks!

    2. Bitcoin Taxes

      We don’t currently import Venmo or mpesa, since we primarily work with crypto-currencies but we do work with all major BItcoin exchanges and wallets for capital gains and income tax calculations.We do show a net balance of your wallets and their equivalent USD value, which is definitely useful for tracking performance over time.

  15. Travis Henry

    It looks like http://www.mx.com/ offers a couple of products pretty near to this, although they seem to lack bitcoin support. In particular, the Helios cross-platform framework and Nexus financial data API are worth checking out.

    1. fredwilson

      thanks. will check this out

  16. JimHirshfield

    AS IF I know where all my non-digital money goes now.

  17. LE

    I want Mint.com for digital money services, starting with the Venmo and Coinbase mobile apps. That would be super helpful for me and, I suspect, for everyone using these digital money services.I don’t. I can’t even imagine exposing important banking, personal info and money details in that way. You want to really trust such important things with a single potentially hackable point of failure? A new startup of all things?By the way this “pay for dinner” thing that venmo does is an artifact of the college crowd. You know as well as I do when older folks do this they just split with credit cards or cash and it works fine. Not a problem that needs to be solved. Ditto for rent payments. Nobody isn’t going to rent your apartment because they have to split the rent non-venmo ways.

    1. ZekeV

      I agree. All the apps eventually want to sell your data. Even in “aggregated” form I have no trust that it’s not sitting there with identifying details on it, in the cloud, for a moderately competent thief to take. And the more revenue these companies derive from the sale of my data as opposed to what I’m willing to pay for the service the less they are focused on my interests. I do, necessarily, trust my financial info to banks and credit cards, and have been a victim of small-time identity thieves on numerous occasions. Perhaps there is room for a truly customer-focused solution to leapfrog the established players, though. I mean, the banks still rely on completely insecure credit card numbers as the means of authorizing transactions, b/c enabling super convenient payments is worth it to them, even at the cost of significant fraud.If a startup were to use client-side encryption and obfuscated code so that only my device in my physical control ever saw my financial details, and basic pgp to ensure that the transaction receipts at the merchant couldn’t also be used to authorize more purchases… then we’d be getting somewhere. Oh, but the monetization scheme would have to involve customers paying for service, since the data could not be sold to third parties.

      1. LE

        banks still rely on completely insecure credit card numbers as the means of authorizing transactionsAll of that risk is pushed off on the merchant. So it makes complete sense. If you are a merchant (we are) and someone uses a stolen credit card they just back the money out of your account (your processor) and then charge you say $35 for having to even do the paperwork. Then flood you with paperwork to deal with it. So it’s actually a good system. Least of anyone’s issues is having a credit card number stolen you are 100 protected almost always, right? Why make it more difficult and more secure? No reason to.

      2. Will Pangman

        Our goal is to provide Tapeke as an always free app for end users. We think we’ve come up with some creative monetization strategies wherein user data is not for sale and extended or exotic functionality is available for purchase a la carte.

        1. ZekeV

          As long as your solution is provably zero knowledge, it sounds promising!

    2. Matt Zagaja

      I do not really worry about my money getting hacked. The UCC is pretty favorable to consumers on liability and my financial institutions have been good about the one or two times there have been fraudulent charges. They always reverse it right away and I get overnighted a new card at no charge to me.

    3. Will Pangman

      This is why we built Tapeke with end-to-end encryption. Privacy with Tapeke is defined by the user, not Tapeke. Security breaches – if they were to happen to Tapeke – would not harm or expose any user data as it is encrypted on the client side before it’s sent and stored in Tapeke servers.

  18. LE

    I bet it exists or that it is being built. I just haven’t see it yet. And I want it. Badly.Today’s “RFS” [1] I know you want to be ahead of the curve on things but what is the footprint of these types of services such that one home is even needed for them? And for that matter how much has MINT penetrated the market for what it does? (A question.)Look, there are plenty of things that I would like that would be good and make my life easier or entertain me. But I recognize they are very niche and not something that many others really have any interest in.But where did it all go. How much came in and why? And how much went out and why?Who cares? Why do you care?For years I have entered all transactions painstakingly into quicken. So for example I know that I spent $2000 last year at Starbucks or $3000 last year on sushi. But so what? In the end what I’ve found is that it doesn’t even really matter and that I could easily guestimate close to the same numbers.My point is, other than curiosity and entertainment, what are you going to do with “How much came in and why? And how much went out and why?” And specifically you? With the money that you have why does this matter at all? You know it doesn’t matter. Admit it.[1] Request for startup.

    1. JimHirshfield

      To track real estate investment costs…that’s one reason I can think of from reading Fred’s post.

      1. LE

        At the end of the year when you do taxes you are going to have a bunch of costs from all over the place. The ones that Fred mentions specifically are rent and paying the super (presumably for the coop or condo fees). If it’s a condo he also has taxes. He might also have some repair costs as well. Maybe utilities depending on the building. Not seeing how what he is describing (and owning properties myself and having to deal with this type of thing for years) really is helped that much (or at all) by what he is asking for.End of year taxes is a clusterfuck of getting together all sorts of data that you need no way around that. I’ve got a pretty good system setup where I track things going in and out of bank accounts by literally putting them in file folders at the time of the event. (Paper or pdf) Works very well. Everything is traceable. Even checks written to me for credit card rebates get deposited and not cashed just so there is a paper trail (has nothing to do with being honest and paying taxes it’s just that it’s worth it to not wonder “did I get that check or not” keeping the system intact is worth it).

  19. MaticBitenc

    It is being built.

    1. JimHirshfield

      You keeping it secret?

    2. fredwilson

      by whom?????

      1. MaticBitenc

        We’re finishing up our new financial platform, next step short after is hooking up all those different services. UI preview from last year: https://www.youtube.com/wat

        1. fredwilson

          thanks. send me an email to fred at usv dot com. i’d like to learn more

          1. JimHirshfield

            Take the meeting in Slovenia πŸ˜‰

        2. JimHirshfield


          1. MaticBitenc


        3. William Mougayar

          when will you be adding cryptocurrencies?

          1. JimHirshfield

            They already support Bitcoin…says so in the vid

          2. MaticBitenc

            Full support for Bitcoin in 2.0, with fresh exchange rates, all 9 decimals :), but the auto import from trading platforms will come in the updates soon after. We’re open to other cryptocurrencies in the future as well of course.

  20. Joe Peters

    This is exactly why Bonafide exists. We’re exploring all he interesting use cases of aggregating public addresses. https://bonafide.io

    1. William Mougayar

      I had you as a Reputation solution. How does it relate to personal accounting?

      1. Joe Peters

        In order to do a reputation system you need to aggregate public addresses across a number of Bitcoin services. Our upcoming product update allows people to see all their transactions in a single view from Bitcoin services we support. A user can tag and track their finances in addition to building a reputation.Because we went through 500 as a reputation service that has been our initial focus but it’s certainly not the only thing we plan to do.

        1. William Mougayar

          That’s great. Looking forward to it. thanks.

          1. Joe Peters

            I was on my phone earlier so I couldn’t necessarily reply in great detail. Our overall goal is to make bitcoin much more useful for the those in developed markets who may value convenience over their privacy. Reputation and identity is a necessary step to mainstream bitcoin usage, but so is bringing your bitcoin activity together (seeing a balance, tracking funds), and having context about what you’re doing in the ecosystem. It’s unreasonable to think that the average person will trade their bank statement which makes it easy to look back at their purchase history for a bunch of hashes. We hope to solve that problem.

  21. Matt Breuer

    Mint actually lets you add Venmo as a bank account, the same way you add any other account

  22. victorpascucci3

    Check out MX Enabled fka MoneyDesktop, http://www.mx.com/ They’ve got Venmo and have even more amazing offerings coming out. It’s what digital personal financial should be today.

  23. LibraTax

    By the way Fred, this is Jake Benson, founder of LibraTax. Happy to comp you a year of membership if you’d like to try it out – tax season is coming up and LibraTax is the easiest way to calculate your taxes on bitcoin holdings. Our vision is to expand that into personal finance management tools as well, we’ve already got a tested infrastructure to do that. Right now we’re integrated (and actively working with) Coinbase, Bitstamp, Blockchain.info, BTC-E, BitGo and we’re looking into integrating Venmo, mPesa and other services. ChangeTip is on the way and will be the first to use our own API. Would love your feedback, and happy to speak anytime!

  24. Rick

    Fred,When you gonna’ do another podcast?

  25. Jon Bittner

    I’m the CEO of Splitwise: we provide a mobile/web ledger for social payments. We aren’t Mint and we don’t do accounting, but I thought I should mention here that Splitwise is also excited about helping people manage digital money and supporting all the new ways people want to transact.Splitwise tracks debts, IOUs, payments, and shared expenses across several digital money platforms, and the use cases Fred mentions in the post (renting, landlords) are very common on Splitwise. We integrate with Venmo and PayPal and record those payments when they are initiated on Splitwise. Bitcoin is a currency we support and help people track, but don’t do any automatic importing from Coinbase/other wallets or the blockchain yet. We tracked over $1B USD in 2014 and also are growing internationally.If anyone here is interested in talking to us about the space, I’m [email protected] or find us at http://splitwise.com

  26. Adarsh Pallian

    This is probably something we could build inside Trippeo.com – I’ll shoot you a note.

  27. Elle Mundy

    Mint does support Venmo as a bank/data source.

  28. Arthur

    The big innovation in 2015 will be stable-value digital currency projects. There are a number of Bitcoin trading options available, including Coinapult’s LOCKS and BitReserve.The really interesting stuff though is happening in the Bitcoin 2.0 space, in particular NuBits, which has maintained a $1.00 US price peg since Sept 2014. It’s perhaps the world’s first decentralized private stable digital currency, maintained by a group of “shareholders” distributed worldwide. Fascinating to think we may be entering an era of private digital currencies that operate beyond the scope of governments, while retaining the flexibility required to adjust to different supply/demand conditions. There are other stable entries coming soon including Schellingcoin, Truthcoin, BitUSD, and CoinoUSD.

  29. Kenny Fraser

    I am with you. Would love money to go digital. I think MPesa and its imitators will be the model. Account information and the like is built into these systems. Plus there is a whole ecosystem of other apps built on MPesa – insurance, loan finance etc. In Kenya this solves a real problem. In the developed world none of the apps offers is really compelling. Credit cards are just not that much of a pain.

  30. Prokofy

    Kenya. Because Kenya is where I always look for information about rock-solid financial practices. http://mobile.nation.co.ke/

  31. Charlie Benkendorf

    I have this exact gripe with venmo. I will say though you can get 50% of the way there by keeping your venmo balance at zero. That way anytime you send money it debits your linked account and mint picks it up. The reverse though , tracking money in, is tricky unless you diligently clear account after every time you get a notice you’ve been paid by someone. I chalk up to an opportunity for venmo to improve ux.

  32. Conrad Ross Schulman

    ure looking for an ‘ING’ type tracking system!

  33. Chimpwithcans

    Hi Fred, Being from Kenya I asked around what was the best app to check M-PESA accounts and got this back so far: https://play.google.com/sto… Thought this might be of interest and will keep u updated if i hear of anything interesting.

  34. Antonio Rocha-Ferreira

    Just google it to download. No app for europe. Horrible reviews on the app store, seems no customer service at all. Scaled to soon it seems. https://itunes.apple.com/us

  35. Scott

    Hi Fred, good article. The reason you point to is also one reason why we created the Airibtiz wallet. It has a full transaction ledger and reports can be run in CSV and exported to Quicken / Quickbooks. Please give it a try in both Apple App Store and Google Play Store.

  36. Scott

    Airbitz Wallet transaction screen shots below (toggle between balances/transactions shown in BTC or $). Oh, you can also send BTC via BLE….neat o!

  37. Erasmus Hagen

    We’re currently building a wallet analytics tool for Bitcoin – like a Mint.com for Bitcoin. Don’t deal with mpesa, venmo etc., but our beta is already a really useful tool to see what’s going on with your Bitcoins across all your wallets…. You can try it out here: https://beta.coyno.com/

  38. Scott

    pic.twitter.com/2nXWTNfbNu And if you use the @Airbitz #Bitcoin wallet, you can easily tag your transactions and get them ready for @Libra_Tax