With more than 70 million users, Venmo is one of the most popular apps for sending money to family and friends.
Venmo is fast – offering instant payments free of charge from a bank account or debit card, while credit card transfers are low cost.
Despite the pros, Venmo does fall short in privacy, and the network is a haven for scammers.
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Getting Started With Venmo
If you want to download Venmo for a try, the latest versions of the app are available from the App Store or Google Play
Sign up is free, as are sending money from a linked bank account, debit card or Venmo accounts.
Paying with a linked credit card comes with a three per cent fee for each transaction, a common standard charge for payment apps.
You may end up with more than one payment app, as although Venmo lets customers pay businesses, the number of firms using the service is limited.
What Happens To Your Money In Venmo?
Under the bonnet, Venmo is another payments app that allows users to send and receive money.
The add-on that sets Venmo apart from other payment apps is social networking.
Venmo users can add friends within the app and view a payment history feed tagged with messages or emojis. To stop other users from reading your posts, you can toggle them as public, private or just between you and the payment recipient. Venmo keeps payment details private by default.
To use the app, you transfer money to a Venmo account from a bank or credit card.
You can spend that money with the app, transfer some to someone else with a Venmo account or leave the cash in your account. Incoming money from other users is added to the balance so you can transfer some or all the amount to your bank.
Another helpful part of the app lets a group of Venmo users split a bill between them.
What’s Good About Venmo?
Venmo does the job of a payments app simply and effectively.
- Most users will have no problem setting up an account and are ready to send or receive cash in a few minutes.
- Splitting expenses is a breeze with the on-screen calculator
- If you don’t use instant payments or a credit card, Venmo has no regular charges to run an account or transfer money
- Businesses can download a checkout version of Venmo
- Venmo offers a debit card linked to your Venmo account that has no annual fee and the bonus of cash-back deals at some stores
- The Venmo credit card has no annual fee and pays rewards by category, so you get 3 per cent back on your primary category; 2 per cent on the next category and 1 per cent on the rest of your purchases
What’s Not So Good About Venmo?
- Sending money from a Venmo balance to your bank can take between one and three business days. If you need the cash faster, Venmo instant transfers come with a 1 per cent fee.
- The Venmo credit card may not offer the best cashback deal, so compare the market before taking one
- Everyone can see your payments on the social feed. The amount is hidden, but your username and that of who you are paying are visible. IT can be a chore to go in and change your privacy settings to private every time you make a payment
- A big bugbear for many users is you cannot cancel a Venmo payment regardless of the reason. Once you have clicked on send, the money is in the system and irretrievable. You can only recover your money if the recipient agrees to send the cash back.
- You can only use Venmo in the USA. Users must have a permanent US address and cell phone number and can only transfer cash to a US bank account. That means no foreign exchange transactions. If you want to send or receive money from overseas, then Venmo is not the app for you.
- Venmo scams are rife. Fraudsters send payments from stolen cards and then contact you claiming the transfer was a mistake and ask you sent the money back. If you do, you’ll be out-of-pocket as when the cardholder reports the theft, Venmo will take the money from your account without warning. So you’re left double the amount light with no way to recover your money.
Venmo Costs
Venmo marketing blurbs play on the fact the app is free – but that’s not the cash for every transaction.
Beware of the small print – instant transfers come with a one per cent charge.
The minimum for a transaction is $0.25, and the maximum cost is $10 for sending $1,000 or more.
Free transfers take between one and three business days.
For example, sending cash to a friend on Friday using the free Venmo service means the money might not arrive until the following Wednesday or even later on a holiday weekend.
Sending a payment from a credit card comes with a 3 per cent fee, which is usual for most payment apps.
Venmo As A Crypto Wallet
If you have a Venmo account, you can buy cryptocurrency for as little as $1.
Venmo acts as an electronic wallet for Bitcoin, Ethereum, Bitcoin Cash and Litecoin.
Registered users can buy, sell or hold cryptocurrency within Venmo.
To deal in cryptocurrency, open Venmo and select ‘crypto’ from the menu.
From the menu options that are displayed, you can trade or hold cryptocurrency.
The exchange rate includes a charge on each purchase and sale sliced by Venmo, so you may get a better rate for the same cryptocurrency through dealing directly with an exchange.
Venmo Summary
Backed by PayPal, Venmo is an all-American payment app that is quick and easy to set up and use to send money to family and friends.
On the plus side, the social media feed adds a bit of fun to transactions, and the broad user base means many of your friends will have Venmo accounts.
The drawbacks are the lack of foreign exchange options, charges on instant transfers and the slow movement of money on free transactions.
A bonus is the cryptocurrency wallet, even though access to cryptos is limited.
Venmo also comes with a wealth warning – watch out for scammers running card payment frauds.
Find Out More About Venmo
Visit the Venmo website for more information about the payment app
Venmo FAQ
Who owns Venmo?
Venmo International is a subsidiary of PayPal, the peer-to-peer payment app.
Will I find my friends on Venmo?
Venmo is a pretty big business in the USA, where more than 70 million registered users have signed up. So the likelihood is several of your friends and family are already on Venmo, and you can quickly sign up and start sending them money.
Which businesses are on the Venmo network?
The network has lots of small businesses as well as some big brands, like Uber Eats, Abercrombie and Fitch or GrubHub
How much money can I transfer each week?
The cap on money transfers depends on your verification as a Venmo user.
The initial limit is $299.99 a week by verifying your email address, phone number and bank account.
This limit rises to $4,999.99 once Venmo has verified your social security number, birth date and address.
The levels are different for transfers to banks – starting at $999.99 for a single transaction, rising to $19,999 a week once fully verified.
How does Venmo find my friends?
The Venmo app scours your Facebook profile to find your friends and then adds them to your Venmo profile. You can also find and add friends by request.
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