Hello World. I'm Ankita.

Technology, Innovation, Impact. Humor on the side.

Splitwise: A Review

I started working with a Brazilian big data aggregator/analytics provider this September as part of a 4-person team of MBAs through MIT’s Global Entrepreneurship Lab. We had the opportunity to spend three weeks in January 2016 in Brazil to execute our project — which was an amazing experience — but that’s a story for another day. Today, I want to talk about Splitwise, a payments app I was introduced to while working in Brazil.

Within a day of our being in Brazil, we realized that we were picking up the bill for each other so much between restaurant bills, cab fare, etc. that keeping track of everything was getting to be a hassle. While we were all avid Venmo users, given the sheer volume of transactions we were having within the team in the span of a single day, it made little sense to keep Venmo-ing each other money throughout the day. (Venmo transactions hit your bank account immediately once you’ve depleted funds in your Venmo account, which meant that money would be constantly shifting between our bank accounts during the day.) One of my teammates had heard good things about Splitwise, so we decided to give it a try.

Splitwise, In A Nutshell

(Images taken from Splitwise App Store Gallery)

Splitwise is an app (available on iOS, Android, and web) that keeps running tabs on what individuals owe one another so that re-payments can be done in bigger batches, rather than paying for each line item owed. Splitwise is also capable of sending reminders through email and/or mobile push notifications.

Apart from the fact that the app was free and seemingly without any sort of hidden fees or need for in-app purchases, I instantly grew to appreciate the following things about the way the product was designed and built:

  • Venmo Integration – The app integrates with Venmo to allow individuals to settle tabs digitally (but also has a feature to keep track of cash repayment). The integration was seamless, only requiring me to hit a few confirmation buttons to go between the two apps and clearing my tab.
  • Simple UI – the user interface was quite clean yet beautiful, especially compared to other payments apps that I’d seen. PayPal and Venmo, both popular peer payments platforms, have a completely different design aesthetic; and, between their font, color and menu stylistic choices, both come off a bit more cluttered and clunky compared to Splitwise.
  • Automated Tabs – the running tab built within the app meant that we could tell who in the group owed substantially more than others at any given time. This in turn allowed us to determine who ought to be paying the next bill in attempt to balance out expenses.
  • Reporting/Analytics – this was still a bit primitive in it’s present state, but I could see great potential at expansion in the future. Currently, Splitwise tracks not only how much the group has spent in total and how much of the group’s expenses you’ve footed, but also what portion of the total group expenditure has been attributed to your expenses.

Why Hasn’t Splitwise Taken Off More Substantially?

As far as the universe of consumer startups and productivity tools go, Splitwise is kind of old (you can see an initial review done up in LifeHacker that dates back to 2012…when their integration for settling bills was still just with PayPal). Since it’s inception, other peer payments platforms like Venmo have really taken off. And, while Splitwise does have bill-settling integration with Venmo, Splitwise still lags in adoption. Why?

  • Relative Advantage: Low. The advantages of Splitwise vary depending on what you consider as its alternative. With its added convenience and automation, Splitwise has enormous advantages compared to excel files, taking mental tally, or scribbled IOUs on paper. With its ability to form groups and batching transactions instead of having many individual requests hit your bank account, Splitwise is designed to better meet the needs of repeat groups than Venmo; however, there are a myriad of other apps that solve for more specific use cases, like check-splitting amongst friends.
  • Compatibility: High. Application available on Android and iOS and with both desktop and mobile versions means that most everyone (in the connected world) can use it almost instantaneously. Given the mobile capabilities, it has limited intrusion on the user’s life.
  • Complexity: Medium. The initial in-app tutorial left something to be desired. Though the app was quite visually appealing, some of the interaction design choices were counterintuitive. It was as though they tried to simplify the visuals so much that some basic elements in the user’s digital journey were hidden, which resulted in it taking us a few days of using the app to fully comprehend all the functionality. And, if it’s taking 4 MIT students that long to understand intent, there’s something to be said about the new user experience design…
  • Trialability: High. Given that the app is free and the before-mentioned compatibility with most popular devices, the only hindrances to being able to trial the product is what is typical of any app – signing up for an account (though they do have single-sign on possibilities).
  • Observability: Low. The only people who can see you using Splitwise are those who you are transacting with. In this way, Splitwise is more similar to clunky predecessors like PayPal rather than the inherently social peer-lending platforms like Venmo. In fact, I’d argue that Venmo’s ability to link social currency with monetary currency – through public feeds allowing users to read the story behind other user pairs transaction histories – is really how they were able to win in the peer transaction market.

From this [rather rudimentary] analysis, if Splitwise wanted to drive greater diffusion and adoption of its product – I’d advise that they focus their product roadmap to include more social features (thus driving greater observability) and greater focus on use-cases they are really trying to solve for (to improve relative advantage).

Future Product Enhancement Opportunities:

Although Splitwise made life easier for my team, there is still room for product improvement. I think one of Splitwise’s greatest challenges is that it hasn’t really figured out which use case(s) it’s actually solving for; it tries to address too many use cases in such a generic way, that it doesn’t effectively solve for any completely. Different groups in different settings will have differing needs from a group transaction app: features developed for a group of roommates trying to settle rent and utilities month-after-month in mind does not translate exactly to a group of friends splitting a check or another group traveling internationally.

I have a firm belief that products should focus on providing solutions not just cool additional features. I think Splitwise has a great opportunity to be the go-to platform for all group transactions. But, in order to do so they need to start looking backwards and understand all of the pain points and underlying use cases. Then, build features and enhancements based on prioritization of user pain points.

For the group international travel use case, for example, here are two new features I’d consider prioritizing:

(1) Currency Selector or Conversion Toggle

Splitwise currently defaults the currency to U.S. dollars and there isn’t any way of changing that within the app. What this means is that if you’re intending to use Splitwise for keeping track of international group transactions, you either have to a) convert every transaction from home currency to US currency, or b) mentally note that everything you are paying for has a $ U.S. symbol but the end tab will need to be converted from local currency to U.S. currency. Option b poses further problems, however, when you try to settle the final tab through the Venmo integration. Since the currency conversion isn’t built within the app, manual currency conversion and payout through Venmo results in Splitwise not zero-ing the tab since the full amount noted by the system in $ U.S. was not paid.

One work-around to this problem would be to develop an enhancement within the group formation set-up. When first forming a group within Splitwise, the app could ask the user to select the purpose of the group (i.e. – group travel, roommates, etc.). This step would effectively make the user self-filter on the use case. And, if travel is selected, it could unlock and make features like currency selection visible on the main menu. I envision the currency selection being something that could either automatically sync with global currency exchange rates or allow the users to manually set exchange rate for their group. This not only solves an underlying user pain point for traveling groups, but also doesn’t overwhelm other users or take from the screen real estate from those who wouldn’t need these types of features.

(2) Collaborative Calculation Tool

Splitwise currently has a few options for splitting bills within a group: equally between all members, by specifying percentage breakdown for each member in the group, or manually entering values for each member. Dividing equally or by rough percentages is perhaps the easiest way to split a bill, but manual calculation of what each person owes is the most fair. Splitwise does not make it easy to be fair. In order to input manual amounts, the user must first specify what the total bill was and then specify amounts to attribute to each group member. Unfortunately, the app does not have any in-app calculator. So, if each member is in charge of multiple line items of a bill, then the user must 1) exit the app, 2) use their phone’s calculator app to come up with individual totals, and finally 3) return back into Splitwise to input each individual’s allotment. This is a terrible user experience.

Putting in an in-app calculator would streamline the user journey and be an easy fix to the broken user journey. However, something that would solve this issue while simultaneously boosting Splitwise’s relative advantage would be the addition of a collaborative calculation offering. Instead of making it the responsibility of a single user to split the bill for an entire group, what if the receipt for each transaction could optionally be uploaded and each member of the group had the ability to indicate what line items on a bill ought to be allocated to them?


The peer-to-peer payments space is really beginning to become big, and I’m looking forward to seeing what happens next – both with Splitwise and with other players that are popping up.

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This entry was posted on January 31, 2016 by in Technology, Travel and tagged , , , .


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