What Is Venmo?

Venmo is a free peer-to-peer (P2P) paym𝔍ent app available for iPhones and Android phones. It’s also free t🔴o use Venmo to pay participating merchants, who now number in the millions.

Some other Venmo ওservices carry a fee, however. Payments that go thr𒁏ough a credit card account rather than a linked bank account or the user’s Venmo account incur a 3% fee. There are other miscellaneous fees for transferring money instantly from Venmo to a bank and for depositing checks.

Venmo offers the option of a Venmo debit or credꦚit card, which also 𝄹carry fees.

How Venmo Works

After downloading the Venmo app from the Apple Store or the Google Play store, users are given options to link their Venmo accounts to a credit card, debit card, or checking account. Once enrolled, a Venmo user can instantly begin exchanging funds with any other Venmo user.

Venmo does include some social aspects, notably that transactions can be seen by anyone on the app. Users can opt out of this feature by changing the default privacy setting of “Public” to “Friends only” or “Private.”

For peer-to-peer transactions, Venmo is a middleman between the accounts of two users🎀 conducting a transaction. For example, if two friends go out to dinner together, rather than splitting the check in the restaurant, one might pay the bill with a credit card. The second friend could repay the first by sending their portion of the bill via Venmo. In this case, the funds are simply transferred through the two Venmo accounts, and neither use pays a fee.

You can make payments through the app without holding the necessary funds in your Venmo account. If a payment exceeds your current Venmo balance, the money will be taken from your linked bank account. If the transfer amount is equal to or less than your balance, the funds stored on the platform will be used.

Venmo has dominated the P2P payment market by making the transfer of funds more fun and social. Users can use emojis to describe their payments or requests. For example, if one friend fronts their buddy the cost of a hamburger, the buddy can issue a Venmo payment back to them, adding a burger emoji as a playful gesture.

Such customization can take the awkwardness out of asking someone to 澳洲幸运5官方开奖结果体彩网:pay back their part of a meal or another expense.

How to Send or Request Money

Money can be sent or requested by tapping the pay or request button in the Venmo app and then entering the other party’s email address, phone number, or username. If you are the person receiving funds, you can either keep the cash in your Venmo balance or transfer it to a linked 澳洲幸运5官方开奖结果体彩网:bank account.

Using Instant Transfer rather than the traditional slower delivery option adds a fee. Money can be added to your Venmo account from your bank as well as from a Venmo debit card. There’s no fee for making a payment unless you use a linked credit card.

Age Restrictions for Using Venmo

Venmo’s user agreement specifically requires users to be at least age 18. Individual Venmo accounts aren’t yet available for younger teenagers. However, those ages 13 to 17 can open a “Teen Account,” which is a sub-account༒ linked to the individual account of a person age 18 or older. The owner of♑ the individual account can authorize sub-accounts and is responsible for all activity.

The default setting on Teen Accounts is private, so children’s recurring purchases, locations, and payments aren’t accessible to the public.

Safety Concerns With Venmo

Like other payment or banking apps that connect to users' bank accounts, using Venmo comes with the risk of security breaches, hacking, or data loss.

Venmo uses data 澳洲幸运5官方开奖结果体彩网:encryption technology to protect users against unauthorized transactions while storing user information on servers in secure locations. The mobile payment service also gives users the option to log out of lost or stolen phones and to set up 澳洲幸运5官方开奖结果体彩网:personal identification🃏 number (PIN) codes for mobile applications.

Unfortunat🐓ely, hackers and scammers have been able to circumvent these safeguards. After gaining access to a user’s account, hackers can easily transfer the user’s Venmo balance to a new b💞ank account. By changing the user’s linked email address, hackers can reroute a user’s transaction notifications, leaving them in the dark until the bank finally notifies them of balance changes long after thefts occur.

How to Protect Yourself When Using Venmo

One of the first steps users should take to secure their accounts is to change their security settings to “Private," which will cloak your transaction history. Otherwise, anyone, including strangers, will be able to view details of your transactions by clicking on your profile.

澳洲幸运5官方开奖结果体彩网: To combat h🥀acking, users should also:

• Avoid keeping large amounts of money as a Venmo balance.
• Frequently transfer Venmo transactions to linked bank accounts.
• Only use Venmo to exchange funds with people you know.

Venmo Fees

Opening a Venmo account is free, and there are no monthly fees. A simple Venmo transaction from a user’s bank account, Venmo debit card, or Venmo cash balance is free of charge. If a credit card is used to pay, Venmo charges the sender a 3% fee.

澳洲幸运5官方开奖结果体彩网: Some other services also carry c🏅harges:

Instant Transfer Fees

You can use the Instant Transfer feature to move money from your Venmo account to any U.S. bank account or participating credit card account. There is a fee of 1.75% for Instant Transfer. “Instant” usually means 30 minutes oꦿr less.

You can avoid this fee by choosing the standard transfer option, which is free and takes three to five business days.

Credit Card Charges

Venmo introduced its own credit card in 2020, and it carries a variable but steep interest rate just like most other credit cards. The interest rate, as of September 2024, is 20.49% to 32.49%, depending on the credit rating of the applicant. Cash advances cost the greater of $10 or 5% of the amount. Balances on cash advances carry an annual percentage rate (APR) of 32.49%, which varies based on the Prime Rate.

The Venmo credit card comes with a cash-back feature of 3% on your “top spend” category, 2% on your second most-used category, and 1% on everything else.

Debit Card Charges

The Venmo debit card, issued in partnership withꦅ Mastercard, is free to use except for some ATM fees, which you can avoid if you’re careful.

ATM withdrawals are free from the MoneyPass network but cost $2.50 each from a domestic out-of-network ATM. Further, a $3 over-the-counter withdrawal fee applies when a signature is required for a withdrawal at a bank or financial institution. There are no annual or monthly fees, processing fees, or interchange fees. Merchants pay the transaction fees.

How Venmo Makes Money

Venmo derives significant revenue from the per-transaction fees that it charges merchants. Thanks to PayPal’s infrastructure, Venmo is available at more than 2 million merchants.

Venmo charges merchants a 1.9% fee, plus 10 cents per transaction. Companies are willing to pay these rates due to the number of new customers Venmo brings to their doors. Venmo also offers participating merchants a higher social media profile.

Another stream of merchant revenue is derived from the Pay-With-Venmo button that can integrate into other apps for in-app purchases. For example, Uber allows its app users to pay for rides and Uber Eats using Venmo without leaving the Uber app. Uber pays Venmo a fee for each transaction.

Finally, 💦Venmo makes money from consumers who pay for instant transfers or who use a credit card to fund their p🐭ayments. Venmo also earns money from the Venmo credit card from interchange fees charged to merchants and from interest and fees charged to cardholders.

Criticisms of Venmo

Venmo has been criticized for its security, slow customer service responses to breaches, and failure to protect users’ privacy. These complaints have highlighted the app’s shortcomings. On the positive side, tꦏhey have also forced t𒅌he company to take measures to prevent future slip-ups and serve its customers better.

One notable settlement was reached in 2016 after a complaint from Texas Attorney General Ken Paxton accused Venmo of negligent privacy, safety, and security practices. The settlement included a $175,000 payment to the state as well as reforms to these practices.

In February 2018, Venmo reached a settlement with the 澳洲幸运5官方开奖结果体彩网:Federal Trade Commission (FTC) concerning the company’s failure to disclose information to consumers about privacy settings. The FTC also found the company in violation of the 澳洲幸运5官方开奖结果体彩网:Gramm-Leach-Bliley Act (GLBA) Safeguards Rule, which requires financial institutions to implement measures to protect the security, confidentiality, and integrity of customer information.

In January 2021, the 澳洲幸运5官方开奖结果体彩网:Consumer ꦿFinancial Protﷺection Bureau (CFPB) began investigating Venmo’s treatment of scam victims, following complaints that the payment app had been threatening to send debt collectors to their homes. The probe included unauthorized funds transfers and how Venmo handled funds mistakenly sent to the wrong account. The probe closed in May 2024 with no enforcement action taken against Venmo or PayPal, but the CFPB continues to seek more in-depth regulation and oversight of payment apps.

The Bottom Line

Venmo is a free payment platform when transferring money between private parties and has options to fund transactions via credit card for a small fee. It’s also free to use to pay for purchases in-store (but not by tapping into a credit card). It has become one of the most popular peer-to-peer payment platforms and has branched out to merchant sജervices and offering its own branded credit card.

While Venmo is easy to use, its users are still vulnerable to hacks and cyber theft. Use Venmo with the same caution that you would any other online payment platform. Monitor your transactions and 澳洲幸运5官方开奖结果体彩网:change your password regularly.