Payment platforms are a dime a dozen, so why is Venmo so popular?
When the need arises to transfer money, accept payment, or split the bill without dealing with cash, there are various options to choose from. A notable giant in this field is Venmo.
This article details everything you need to know about Venmo, including how to set up a Venmo account, how safe Venmo is, and the fees associated with its use.
What Is Venmo?
Venmo is a mobile payment service that allows you to use a digital wallet for money transfers with others, such as your friends and family. Venmo was created to provide a social way to make payments without having to deal with cash.
Who Owns Venmo?
Venmo and PayPal are two giants sharing spaces in the same markets. However, you may be shocked to find out that Venmo is actually owned by PayPal. In 2013, PayPal bought Braintree, and indirectly, it also bought Venmo. This is because Braintree had acquired Venmo in 2012. Later, in 2013, Venmo became part of the PayPal family of brands centered on payment solutions including Xoom, and iZettle.
How Does Venmo Work?
To use Venmo, you must first set up an account—find out how to do so later in the article.
The process of sending money to someone using Venmo is fairly straightforward. It is made even easier with a feature that allows users to sync their contacts to the app, enabling them to search for any associated Venmo accounts held by friends and family. Contacts can also send money using their username, email address, or mobile number.
After choosing the recipient and the amount, Venmo will prompt you and ask what payment method you require. If you already have an existing balance with Venmo, you can use those funds for your payment. Otherwise, the funds will be taken from the bank account, debit card, or credit card initially chosen as your desired payment method.
Once you click send on your payment, the money should reflect on the recipient’s Venmo balance within several minutes. Therefore, you want to ensure that you are sending money to the right contact because Venmo will not refund your money if you send it to the wrong recipient.
Venmo also offers a feature that makes it possible to request funds from others. After a request is made, a prompt is sent to a payee to pay you. Venmo provides the payee with easy access to your contact info, along with the clearly presented amount of the requested payment. As soon as the person receiving your request for money acts on it (by making a payment), the funds reflect in your Venmo balance.
Is Venmo Safe?
While Venmo is safe, it is advisable to remain alert and use common sense when dealing with financial transactions. With that being said, Venmo transactions are considered very secure.
Venmo uses encryption to help protect your account information and monitor account activity to help identify unauthorized transactions. This is used along with another layer of security, which you can use to add a PIN code to the app.
Unfortunately, there have been occasions where hackers andhave taken advantage of users. Common examples of this can be found where hackers gain access to accounts through negligence involving password sharing or cracking passwords.
Once access to a user’s account has been gained, hackers can easily transfer the Venmo balance to a new bank account. The hackers can also change the user’s linked email address and reroute a user’s transaction notifications, leaving them oblivious until the bank notifies them.
What Is a Venmo Account, and How Do I Set Up An Account?
A Venmo account allows you to use the financial services offered by Venmo. Follow the instructions below to sign up for Venmo:
- Download the Venmo mobile app, available on both & .
- Open the Venmo app.
- Choose your sign-up method, then input standard information such as name and address.
- Create a secure password.
- Verify your phone number and email address.
- Add and verify your bank account.
How Does Venmo Make Money?
Venmo costs absolutely nothing to set up, send money or receive money. Also, there are no hidden monthly fees. If that is the case, it begs the question, how does?
By facilitating transactions between its users and businesses, Venmo charges the business a small percentage of the sale. Venmo derives a significant amount of revenue from the per-transaction fees it charges merchants. Courtesy of, Venmo is compatible with more than two million merchants, thus enabling Venmo to collect two discrete types of income streams.
Venmo does have certain fees, but they are easily avoidable. Although Venmo offers free payments from linked bank accounts, there is a charge of 3% for payments from a credit card. In addition, there is a 1% fee for moving money between your bank account and your Venmo account instantly. Choosing not to pay this fee may mean that the transfer takes 1-3 days.
Venmo Is Good Choice for Money Transfer Services
In recent years, Venmo has seen significant growth, from 10 million to 40 million users.
Thus, it comes as no surprise and emphasizes how much of a good choice Venmo is, with a straightforward sign-up process, accessibility that caters to mobile users on the go, a simple rewards program that offers cashback for those who participate, no charges except for avoidable fees, and safe transactions which keep your information secure.
It does its part to stand out as one of the leading online peer-to-peer payment platform services on offer today.