PayPal was a revolution in the online payment space when it came out in 1998. Through the years it became more and more popular among the new generation to transfer money to each other’s accounts. Currently, it is the world’s most popular digital payment service. But with smartphones becoming popular, there became a need for a mobile-first payment service that was specifically designed for phone users. Also, Paypal was designed as a business-friendly payment service, i.e. it is mainly used by businesses to transfer money or for people to make international transactions. That’s why there became a need for Venmo in the market as it was specifically created to facilitate small money transfers between friends and family. In this article, we will be going through in detail all the features and services offered by Venmo.
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What is Venmo
Venmo is a peer-to-peer payment app for smartphones created to facilitate fast and easy transfer of money between friends and family. Venmo was founded in 2009 by Andrew Kortina and Iqram Magdon-Ismail as a mobile payment service that used text messages and SMS for easier payments. Later they switched to an app-based service. Venmo started as a completely person-to-person payment service and did not allow payments to businesses because PayPal was already doing that. And as Venmo was acquired by PayPal in 2013, they used it as an only phone service for individuals. But later in 2018, Venmo started accepting consumer-to-business transactions after it started becoming popular among the masses. Currently, Venmo not only supports P2P transactions but also direct-to-business payments or payments through scanning QR codes. Establishing Venmo QR at every shop in America is the next target of the company. With more than 14% of all Americans using Venmo, it processed about $230 billion of total payment volume in the financial year 2021 with an average transaction value of $60. Recently in 2021, Venmo also added payment through cryptocurrencies as an option of payment. You can also buy, sell and store cryptocurrencies in your Venmo app. Venmo has been following and adapting the new market trends and this is what makes it the 2nd most popular online payment app in the United States after Apple Pay, the default payment service in iPhones.
Why use Venmo
Venmo is getting very popular among the newer generation that prefers to use smartphones for money transfers rather than carrying cash all the time. This new ‘smart’ generation of millennials wants everything in their smartphone. This is the main reason behind the birth of Venmo and other similar apps. But it is actually more convenient than using cash or debit/credit card. Let’s look at some of the conveniences of using Venmo.
Faster and Easier payments
While cash is the easiest way of paying an individual or at shops, it might become a problem when you have to send money from New York to someone in Los Angeles. Venmo accounts are linked to your phone number and that’s why it becomes much easier to transfer money to people from your contacts. Another common method of payment that people often use for payments at shops is debit/ credit card. This might be very convenient at stores but it cannot be used to pay your friends or any other individual without a POS machine. That is where services like PayPal and Venmo came into play as they not only let users transfer money using their debit or credit cards directly to any Paypal or Venmo user’s account. Venmo also has its own wallet where you can add money directly from your bank account or through your card. This makes money transfer much faster as it instantly transfers from your wallet to the recipient’s wallet. For direct transfer through the bank, it might take 3 – 5 business days and for faster transactions, it might take 30 minutes.
Completely free service
Venmo is a completely free-to-download smartphone app that is available on both Apple App Store and the Google Play Store. It does not require any account opening fees or subscription charges to use the app. There are no hidden charges or service charges in the app. It only charges a 3% fee for credit card payments and a 1% fee up to $15 for faster 30-minute payments.
Pay at businesses
Venmo is now widely accepted all around the US in multiple businesses and outlets. Popular businesses like Uber, GrubHub, Hulu, Poshmark, Foot Locker, etc. have now started accepting Venmo as a payment option. This makes payment at shops much easier than paying with cash or card as all you need to do is just a few taps.
How to signup for Venmo
In order to use Venmo, you need to first sign up for the Venmo account and it is very simple to do that. It can be done in only 5 steps:
- Download the Venmo app: The Venmo app is available on both Google Play Store and the Apple App Store.
- Choose your account: Once you download the app and open it, you will be asked to choose between a Personal account and a Business account. The personal account is for individuals and the Business account is for businesses.
- Enter your Personal Details: You will be then asked for your phone number and your email address. Once you enter the details, you will be asked for an OTP to verify the given details.
- Enter your bank details: Once you have your personal details verified, you will have to enter your bank details to link your bank with your Venmo account.
Once you are done with all these steps, you are ready to add money in your Venmo wallets and you can use it anywhere.
Features of Venmo
Venmo is a P2P payment app for fast and secure digital payments. It all started when one of the founders went on a trip to Kortina and forgot their wallet at home. And you may face this issue too. Thus to solve the problem of only using cash and card and after realizing the potential of smartphones for simpler payments, the two founders came up with Venmo.
So now, let us look at some of the features offered by Venmo.
Fast, Safe, Social payments
Venmo offers a very fast payment service through its digital wallet, and debit and credit cards. It is also very convenient with its User Interface (UI) and User Experience (UX). It has a very smart and fast interface and allows users to chat with one another like a messaging service while facilitating payments. You can chat with your friends, request money from them, and even pay someone with a small message filled with emojis. Venmo started as payment through a text system and now that it has transferred into a full-fledged payment platform, it still hasn’t forgotten its roots. That’s why it still has a messages like interface so that Venmo users can chat and inform each other about payments or request money for a pizza party without having to first text them separately and then requesting for money on Venmo.
Split Bills
With Venmo, you can easily split bills with your friends or your roommate and don’t have to worry about calculating each bill. All you need to do is just open the bill on the Venmo app and choose the split bill option. You can then select people from your contacts with whom you can easily split the bill.
The Venmo Card
Venmo has recently launched its own MasterCard debit card and Visa credit for its users. This card can then be used anywhere including ATMs, and at shops to pay for shopping bills. This card deducts money directly from your Venmo wallet. It also rewards you to pay for bills using the Venmo card just like any credit card. You can also share, split and track your card payments anytime on the Venmo app. The benefit of using a card that is connected via an app is that you can enable and disable transactions using the debit card anytime from your app. This prevents you from any money loss when you lose your card.
Instant Transfer
Transferring money through direct bank transfer might take 4 to 5 business days. But Venmo’s Instant Transfer feature takes only 30 minutes to transfer money from one bank account to another. Venmo charges a 1% fee with a minimum of $0.25 and a maximum of $15 for payment to another bank account.
Buy, Sell, Hold and Spend Crypto
Cryptocurrencies are the new trend on the internet. Everyone around the world is talking about cryptocurrencies and how they can be used. Following this trend, many businesses have started accepting cryptocurrencies as a form of payment. This was a golden space for Venmo to tap in as with growing interest in cryptocurrencies, people are trying to find simpler ways to pay at shops using cryptocurrencies. Venmo, being an already popular app in the digital payments space, is the perfect platform to facilitate crypto payments. That is why in early 2021, Venmo announce that it will allow users to link their crypto wallets to their Venmo account and pay at shops using Crypto as a mode of payment. In August 2021, Venmo rolled out a feature where you can not only spend cryptocurrencies but also use your Venmo balance to buy and sell Bitcoin on its platform.
Grow your business with Venmo
Venmo also launched its support for businesses back in 2016 through the app. business owners can add their businesses to the Venmo app, and users can simply search for their business on the app and order anything through the Venmo messaging service and pay instantly using Venmo balance. This offers a large growth opportunity for business owners through online orders on Venmo.
Is Venmo Safe?
Earlier Venmo used to call its security “bank-grade”, but recently, that term has been removed from its website. Yes, Vennmos is very safe and secure as it uses very strict encryption protocols to keep users’ personal data and finances secure. From the platform’s side, the service is very secure, but it is not hundred percent invincible. As it is an app-based service, anyone with access to your phone can use your Venmo account. To combat this problem, Venmo suggests its users add a separate PIN to their Venmo app so that only you can access the app with the PIN.
Overall the app is very safe as it uses secure servers in remote locations to save all your data on the internet, but it is advised that users should also take all kinds of safety measures and not leak their confidential information to anyone.