What Are Venmo Fees?

Not sure about Venmo fees? Contrary to popular belief, the company charges its users when they make certain transactions. In this post, I’ll explain everything you need to know about Venmo fees.

Venmo is one of the usual popular peer-to-peer (P2P) payment apps. It works on both Apple iPhones and Android phones and makes it easy to transfer funds.

However, it is easy to conclude that the company does not charge a commission when making a transaction. There is a commission charged for every transaction you make.

But then why can’t you see the transfer fees? And why is there a transfer fee if you transfer money to another account using a credit card?

In this post, I’ll explain everything you need to know about Venmo fees.

But first, let me take a quick look at the history of Venmo.

What Are Venmo Fees

How Venmo Became So Famous

The company was founded in 2009, more than ten years ago. But it wasn’t the same Venmo app we know today – it started as a message-based payment transfer system.

Later in 2012, the company introduced a new platform with an integrated social network to its customers. The venue quickly became popular.

Braintree acquired the company a few months after introducing the new platform, and less than a year later, Braintree was developed by PayPal Holdings Inc.

The move has resulted in an exponential growth in Venmo’s user base.

Not only has Venmo made it easy to send and receive money, but it was acquired by the best company at the right time, making it one of the largest payment apps available today.

How Does Venmo Work?

First of all, you must install the app on your phone and create a Venmo account.

After registering, you must link the account to your current version or add your debit or credit card to it.

That’s it – you can send or receive funds from other Venmo users.

Other users also have their bank account or card linked to their account, and the funds you send end up in their bank account.

In other words, the application acts as an intermediary connecting the two accounts.

The balance you see in the app is essentially a virtual book. It only represents funds traded back and forth – it doesn’t execute a transaction outside of the platform.

Until the balance is transferred to a bank account, the money is not technically at the user’s disposal.

What Are Venmo Fees?

When you send money to another user through Venmo, a 3% fee will be charged. However, the company waives this fee if you use your Venmo balance, debit card, or bank account to make a payment.

But, if you use a credit card to pay, Venmo transfers you a 3% commission from the credit card company.

Therefore, if you choose to use your credit card with Venmo, you will need to pay a 3% fee for every transaction you make.

Is Venmo Safe to Use?

Venmo uses encryption technology to protect users from hacking. The servers are stored in secure locations to protect your data physically.

In addition to all this, Venmo users can set a PIN, without which the mobile application does not work.

However, it is essential to understand that every internet connection application is vulnerable to security breaches.

Given that your banking information is present on your Venmo account, you should take steps to protect your account. Here are some precautions to help:

  • Avoid transferring large amounts to your Venmo and forgetting to use it.
  • When money is transferred to your account, wire it back to your connected bank account as soon as possible.
  • Avoid sending money to strangers – only transact with the people you know.
  • Get yourself off the Venmo social network. All you require to do is change your privacy settings to “Private.” This will ensure that no one can see your transaction history.

How Does The Company Earn Money?

Venmo charges you when you use your credit card is just one way the company generates revenue.

Since Venmo is powered by PayPal infrastructure, the platform works great with over two million merchants.

Most of the company’s revenue comes from transaction fees that sellers pay.

But the company generates income in two different ways:

Smart Payment Buttons

The company generates revenue through bright payment buttons that are integrated into other applications. For example, in 2018, Uber added an option to allow customers to pay for rides and their Uber Eats orders using Venmo.

No need to leave the app alone makes Venmo a convenient payment method for many. But on top of that, the company also allows users to split the bill, making it an even more attractive payment option.

Venmo Debit Card

A different source of income for the company is the Venmo debit card. The card is designed to withdraw funds directly from the user’s Venmo balance.

Since Venmo debit cards are connected to the Mastercard network, the card can be used to make purchases at any office that accepts them.

Allowing users to use their Venmo balance via card for business payments has directly led to Venmo’s expansion beyond the reach of any other P2P platform.

Merchants who accept the card or integrate a bright payment button charge a 2.9% commission per transaction plus $ 0.30.

And with that, you know everything you need to know about Venmo commissions!

If you don’t use a credit card to send money to people, you won’t have to pay any fees. You can enjoy the convenience of transferring and collecting cash in seconds, completely free of charge.

Just remember to stay safe while using the app – the above precautions will go a long way in protecting you when making transactions using Venmo.

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