Venmo created a $100,000 giveaway to distract people from their transaction fee increase.
At the end of June, Venmo announced a giveaway for $100,000—divided as $500 a piece to 50 Instagram users and 50 Twitter users with two different drawings. Social media users raised #Venmome, the hashtag used to enter the sweepstakes, to trending status, but some people drew a correlation to a previous announcement that Venmo was raising transaction fees. In several instances, a popular meme was altered to show that some eyes are opened to Venmo’s plan to distract their patrons.
Our analysis showed that no proof exists linking the two events. Paypal, Inc. owned Venmo announced via email on June 22 that changes were being made to their transaction fees.
The changes allow users without business accounts to accept payments for goods and services associated with their businesses. Previously, users' accounts could be suspended if they were accepting business payments through their personal accounts. Now, Venmo users will be able to change a toggle button when sending a payment. If “goods and services” are selected the seller will be charged a fee for their business transaction. The email also detailed an increase to instant transfers from 1% to 1.5%, up from a maximum of $10 to $15. A Venmo spokesperson told The Wall Street Journal the changes were made to keep non-business account holders from suspension from transactions not allowed by the previous rules.
While the conveniently timed sweepstakes do correlate closely to the announcement of raised fees the adage “correlation does not imply causation” applies here. Long have scientists, statisticians, psychologists, and other professions based on empirical evidence studied that two events being correlated does not directly mean that one causes the other. The logical fallacy, though possibly compelling, is merely commotion and speculation without proof.