What Is Venmo?

Written by Robert Ferry on July 1, 2022
What Is Venmo?

If you have ever made any online payment, there is a high probability that you have heard about Venmo. This online payment giant is owned by PayPal and works in similar ways. A person can use Venmo to send payments to friends, family members, etc.

People sometimes do not wish to deal with cash, which is where this mobile payment service comes in, and you can digitally send the payment to the appropriate people. The mobile app allows Venmo account users to exchange money via their platform effectively and efficiently.

People are fond of shopping online, and making such a purchase can have several payment methods. We have heard about paying through credit or debit cards or choosing the option of cash on delivery. But in this new era of digitalization, you can use Venmo to carry out a transaction at authorized websites. However, if you would like to make a payment in person, Venmo cards are available.

This article will discuss Venmo, how it works, and its fees. We will also include the ways a person can contact Venmo customer service. The article will look into how a person can trade crypto on Venmo. Moreover, the guide will list factual information to evaluate Venmo's safety.

What is Venmo?

Venmo is a mobile app through which people can make transactions of peer-to-peer money very smoothly and promptly. The app is inexpensive for making payments to others and carrying out transactions if you buy something from an e-commerce store. The mobile app is available for Android and iPhone phones, allowing it to have a greater user database of who is using the app.

If you send money from one Venmo account to another, the app will not charge you any fee since that is a peer-to-peer connection. However, certain services will cost you a fee if availed. These types of charges cannot be avoided or waived off. For instance, all payments through a credit card account will incur a fee of 3% of the total amount transferred. Venmo account holders will have to pay miscellaneous fees when they transfer money from their Venmo account to their bank account or when they deposit checks.

The Venmo website can also be accessed from a desktop computer where a person can see their account balance and transfer money if needed. Venmo is a convenient way for consumers to exchange dollars digitally or navigate split checks.

Venmo has become quite popular since people can use it to share a cab ride to another place and divide the cost equally. People also use Venmo to return a loan to a friend who helped them at a bad time. Others use Venmo to pay off their rent bill to their landlords. But most importantly, if you go out for dinner with your colleagues and you don't have hard cash on you, there is an option to Venmo that amount to the restaurant or the friend who will pay for you.

Venmo is the upcoming way for a person not to carry any cash, so they can easily use digital banking through the company's app to make payments. Moreover, people who used to hide behind the excuse of not having cash on them can easily Venmo to the other person.

Since Venmo started as a text message system in 2009, it quickly became famous after launching its platform, website and mobile app, which gave people the access to sign up freely. So if you are of the legal age of 18 years or beyond and have a bank account or debit and credit card, you can download and install the Venmo app on your phone and sign up. But you will need to link your bank account to the Venmo account to use it effectively.

People who have become loyal Venmo users have used it to make purchases on various websites by clicking the 'pay using Venmo' button when checking out of the website. Some websites offer the option of 'pay with PayPal', after which they can select the 'pay with Venmo' option.

How Does Venmo Work?

Venmo works similarly to PayPal, where the consumer would need to set up the Venmo account by linking either their bank account or their credit or debit/prepaid card. This is an important step in the registration process. The registration process asks for the person's name, address, and phone information. It is important to note that Venmo is only available in the USA or banks in the country.

People with an iPhone or Android phone can download and install the application. A person can also use their online website to create an account.

Each Venmo user will have a personal QR code different from other Venmo account holders. You can use this QR code system to scan someone else's QR code, which will add them to your account. Scanning other's QR code is also a way to send or receive money.

Users can either press the "request" or "pay" button to carry on with the transaction. If a person has to pay someone, they will click the "pay" button, and the receiver will receive an email notification. Once they click "Accept Payment", the amount will be transferred to their Venmo account, and the person will also receive a confirmation of this transaction.

Now, let's look at the main ways you can use Venmo.

Send Money to Family and Friends

Through Venmo, a person can send money to their loved ones, including their family and friends. This is a digital form of payment that requires the receivers to have a Venmo account as well.

In a group of friends, there is always someone who does not have cash on them but has digital money in their Venmo account. Venmo helps that person by providing a means to transfer their portion of the money to someone who paid for them.

Moreover, within family members, you ought to take a loan from your elder siblings and would like to pay them back. So an easy way for you to do that would be to Venmo them, which is very inexpensive.

Through the Venmo application, a person can add as many people they wish onto their payment list to whom they want to transfer money. To add people, all you need is their name, phone number or email they used to register at Venmo.

Make Purchases Online

As PayPal owns Venmo, many merchants, stores, brands, restaurants, etc., accept payment via Venmo. Some merchants offer to make payments via PayPal, but another option under it allows consumers to carry out the transaction via Venmo. All purchases made using the Venmo payment method will incur no fees, but if you use a Venmo credit or debit card, there are some charges depending upon the transaction amount.

Let's consider an example for better understanding.

If Ben agrees to buy a book from Amazon for $40, then through the Venmo payment method, he can transfer the agreed amount to the store's Venmo account on Amazon. This will increase that store's Venmo account balance while decreasing Ben's Venmo account balance by the same amount. Neither of the parties will pay any fee for transferring or receiving funds.

Venmo will transfer the funds from one end to another, so unless it does that, the money is not in the recipient's account. So the transaction is not 'complete' until the recipient receives it. Hence, Venmo is a digital ledger that represents the changing of funds and does not charge any fee from either party. 

What Are the Fees for Using Venmo?

Setting up a Venmo account will not cost a person, nor are there any monthly charges. Also, the company will not charge you anything if you send or receive money.

However, there are instances when Venmo will make money by charging users a fixed fee. If a person uses their Venmo credit card to pay off a balance, there will be a fee of 3% that the consumer must pay.

Let's look at some fees that the company charges from its consumers.

Instant Transfer Fees

As the name suggests, Venmo will charge an instant transfer fee when a person transfers an instant from their Venmo account to any bank account in the United States. The fee that the consumers will have to pay is 1.75% of the total transaction amount.

The instant transfer fee is there because the consumer wants the amount transferred now, so as this is urgent, the person would need to pay a fee for it. The agreed amount will be sent in 30 minutes or less, and the fee will be deducted from their Venmo account.

Consumers who do not wish to pay this fee can choose the standard transfer method. Under the standard transfer method, they do not need to pay any fee for moving their funds from their Venmo account to their bank account. However, they would need to wait for 1-3 business days to ensure the transaction is complete and the amount is in their bank account. But people, who need the payment sooner, can go with the instant transfer method and pay the necessary fee.

Credit Card Charges

The company introduced the Venmo credit card, which allowed users to get some amount as a loan and pay it off with interest. The purpose of this Venmo credit card was to give some financial relaxation to those consumers that do not have immediate cash in their bank and would like to borrow some funds to make necessary payments.

The Venmo credit card comes with a variable but steep interest rate similar to most credit cards in the industry. The interest rate for the Venmo credit card falls between the ranges of 11.99% to 20.99%. However, the amount of interest a person will have to pay on their loan depends on their credit standing. If the person has a good or excellent credit score, they would be charged minimal interest, but if they have a bad or poor credit score, they would need to pay a higher value.

There are also charges related to cash advances where a person must pay either $10 or 5% of the total cash advance amount. The amount they would need to pay depends on whichever is the highest, between $10 and 5% of the amount.

The Venmo credit card has a cash back feature that allows consumers to earn on their purchases using the card. For instance, the cashback in the most top-spend category is 3% on every dollar spent on it. Similarly, the cashback in the second most spend category is 2%, with 1% cashback in all the other categories.

The top spend and second most spend category will differ for each person, so if someone earns 3% cashback on a restaurant, the other person can earn that on groceries. The same concept applies to the second most spend category.

Debit Card Charges

The Venmo debit is a MasterCard which does not charge any miscellaneous fees relative to other debit cards in the industry. The debit card could be used at ATMs for cash withdrawal which will not cost you any fee if the ATM belongs to the MoneyPass network. But if you use the debit card to make a cash withdrawal from any other ATM network, then a fee of $2.50 will be deducted from your account. So, this debit card is a good choice for people with a Venmo account.

On top of no miscellaneous fees, the consumer of Venmo will not have to pay an annual fee for using the card. This also means there will not be any monthly fees, processing fees, or interchange fees. Moreover, the merchants will be responsible for covering the transaction fee, which is not a financial burden on the consumer. As a result, the overall expense of using the Venmo debit card will be less as the costs have been reduced.

How Do You Reach Venmo Customer Service?

Customer service is a vital function for any business or organization, particularly if it's a growing business. In the case of Venmo, customer service holds immense importance because there are occasions when a person needs the assistance of someone from the company. In this section, we will discuss the customer service department of Venmo.

Let's consider the following example.

What should a person do if Ben made a payment to someone who apparently had the same name as someone else but was the wrong person to receive the money? Only the thought of it would give Ben or someone in place of Ben a lot of stress. And if that amount is quite big, then the amount of worrying that person would do would be a lot. That is why there is always a need for customer service.

Since Venmo does not have a customer service contact number, the possibility of calling them is not an option. However, there are some ways that consumers can use to get in touch with a customer service representative of Venmo.

The following are the ways to contact Venmo's customer service

  • The ideal method to go with is by reaching out to the support staff via email. Through this email, you can tell the issue you are facing and ask for a solution. Someone from the customer service department will get back to you with a possible solution. However, since many people are reaching out for help, it may take them some time to respond to you. But Venmo ensures that their customer service staff works efficiently and will get back to the consumers soon.  
  • The consumers also have an option to fill out a contact form online by providing necessary information such as their name, phone number, and the problem they are facing. This method is one of the fastest ways to get an imminent solution as the staff member can call you and address your query. You can find this contact form on the mobile app under the Get Help and Contact us section and subsection.
  • There is also another option that consumers can go with; it is relatively easy. Through the Venmo mobile application, consumers can chat with the customer service representative. This function is limited to the mobile app and is not accessible via their website. One thing to note here is that the chat has working hours from Monday to Friday, 7 am to 1 am EST, and Saturday to Sunday, 9 am. To 11 pm. EST.
  • Consumers who have queries related to Venmo debit cards can either fill out the above mentioned contact form or send an email here. These consumers also have the liberty to chat with the customer service representative via the chat option through the mobile app at the given timings. You can also call the phone number on the back of your debit card, which is a 24/7 helpline that people there can assist you to some extent.
  • Consumers who have queries related to Venmo credit cards can call the phone number on the back of your credit card, which belongs to Synchrony Bank. If the person loses their credit card or gets stolen, they can call 855-878-6462, who will immediately block their card and issue a new card in return.

How Do I Buy and Sell Crypto on Venmo?

Venmo is ideal if you intend to invest in crypto and carry out crypto trading on the platform. Venmo has several education sources like useful articles and informational videos to help you get started with crypto and understand how it works.

Venmo's crypto function is designed for anyone who is a beginner at crypto trading, so they keep things simple for the consumers to understand. Venmo only offers four types of cryptocurrencies that a consumer can trade with: Bitcoin, Ethereum, Litecoin and Bitcoin Cash.

Consumers can invest as little as $1 and use that amount to purchase crypto. Through Venmo, you can receive price alerts whether it has increased or decreased. Moreover, you can easily track your investment and see how it works in the crypto world. Also, consumers have an option where they can share their crypto investment on their Venmo feed to keep track of how their investment is performing.

Here's how a consumer can buy crypto on Venmo

  • The first step would be to open the Venmo application and click on the crypt icon. The crypto icon can be found in the menu section at the bottom of the screen.
  • There will be four crypto coins that you can choose to trade with, so click on any one you would like to purchase.
  • You would need to click the "buy" option after checking the "Agree to the terms and conditions" notification, which is only needed for the first time.
  • In the next step, you would need to enter the amount of money you wish to invest, which can be as low as $1, with no limits on the maximum amount invested.
  • You would be asked to read the options you selected, so click on "review" if that is done.
  • Click on "buy" to purchase the crypto you want for the amount entered in the process.

You can now track your investment and see how it is performing from time to time.

Is It Safe to Use Venmo?

The simple answer to this question is yes, but you must be vigilant. The various transactions a person carries out are completely safe as Venmo uses state-of-the-art encryption. Venmo has invested a lot of funds to ensure that no one can hack their encryption. This encryption is one of the main keys to protecting their client's information and ensuring no unauthorized transactions occur. So the encryption is designed to catch anyone who tries to steal someone else's identity or private information.

The consumers have an option to add a layer of protection, such as a pin code that will be private and limited to the person using the Venmo account. This pin code will protect all entries to the Venmo application. It is better to ensure that you don't send money to someone who is a stranger to you or involve yourself in buying things from untrustworthy websites.

Since Venmo uses a multi-factor identification, you can sleep well at night knowing that your account is secure. This layer of protection will ensure that only the person who uses the account can use it to send or receive money. Venmo also has extra security features which a consumer can access to add more security to their account. These features include Touch ID login options restricted to the individual's fingerprint only.

Are Venmo Transactions Public

One of the main things people worry about is the default safety setting of Venmo. Since Venmo transactions can be public, people are concerned lie in a breach of security or fraud. However, the Venmo transactions can also be not public as consumers can change the settings.

Venmo has three different privacy settings from which the consumers can choose when setting up the account. Whatever option the consumer chooses will become the default setting for all the purchases and transactions a person carries out using the Venmo application.

However, the person has the right to change the privacy setting at any time or for any particular transaction. Some users change the security setting for each transaction, while others keep one uniform setting for any transaction.

Here are Venmo's privacy settings, as outlined on their website

  • Public

If your setting is public, then all your transactions and activity on the Venmo application will be shared on the Venmo public feed. This means anyone can see the number of transactions you are doing and when the last transaction was.

  • Friends only

As the name suggests, all the transactions you carry out will only be shared with your friends that you have saved on the Venmo platform. These friends include the people you have sent or received money from. They will see all your transaction history. Hence, your transaction will be shared with them on your Venmo friends-only feed.

  • Private

If you choose to keep your privacy private, then all the transactions you do will only be seen by you and no one else. They will not be shared on any other feed and only appear in your personal Venmo feed.

Frequently Asked Questions (FAQs)

Now that we have gone through the information related to Venmo, let's look at some of the questions people usually have about this virtual payment application.

How Does Venmo Make Money?

There are various ways that Venmo implements to make money. First, Venmo makes money when people request to send money via the instant transfer method, for which the consumers have to pay a small fee on the overall payment. Next, Venmo makes money when the consumers use the payment option to purchase mobile phones. Lastly, Venmo makes money when the consumers use the Venmo credit card to make purchases or carry out transactions.

How to Get Started With Venmo?

After downloading and installing the Venmo application on your mobile phone, quickly register by signing up and providing information for the registration process. The information needed to complete the process includes the full name, phone number, address, email address, and bank account number.

Next, you would need to create your login and password and set up a pin code which is only specific to you to ensure safety. Once that is done, your account is activated after confirming it through the email sent to you by the Venmo team.

Upon account opening, you will have a default limit of $300 per week for payments and purchases. But the limit will be increased once Venmo verifies the account. Your new Venmo limits at this time would be the following

  • $5000 rolling weekly limit for person-to-person payments
  • $7000 in weekly authorized merchant payments
  • $7000 in weekly Venmo debit card purchases

These above mentioned limits are linked to one another, so if you reach a limit of $7000 for debit card purchases in a week, you will not be permitted to the other limits.

How Long Does It Take for Venmo Payments to Arrive?

Venmo payments arrive through two distinct categories: if you choose to send money through the standard transfer method, the money will arrive in 1-3 working days. However, if you choose the instant transfer method, the amount will be sent and received within 30 minutes.

People can send money from one Venmo account to another Venmo account which is reflected instantly. But in most cases, it depends on when the person opened the Venmo account. If the Venmo account was recently opened, it might take a couple of days until the payment is received or sent and reflected in the account. But if you want to send money from your Venmo account to your Bank account may take days or a few hours.

Do I Need Extra Security While Using Venmo?

It is advised to take full advantage of every security feature Venmo offers. Although Venmo has excellent encryption security measures, you can opt for two-factor identification by creating a pin code to access your Venmo application.

Conclusion

Venmo is growing in popularity and added features because it offers a safe environment to look after your finances and make the necessary payments to the merchants, family and friends. Venmo offers an efficient and secure way to make online purchases and be free from the worry of holding sufficient cash. Venmo's debit card is ideal for those that require cashback reward features with no fees. It is ideal for students as they can cash in the rewards.

Venmo offers an ideal yet free platform to consumers that are looking to transfer funds to others in an inexpensive way. Their credit card also charges very little for those with a good credit rating. Download the Venmo application today to experience the luxury of convenience and digital financing from the ease of your home or workplace.

Article written by Robert Ferry
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