Part payment app, part social media, Venmo offers a convenient way for friends to request and send payments. Find out how to use Venmo and how it compares to other popular digital payment platforms.
What Is Venmo?
Venmo is a payment app that lets you send or request money from your “friends,” giving it a social media-like feel that sets it apart from some other payment platforms. Venmo launched in 2009. Digital payment giant PayPal bought Venmo in 2013, and has owned the platform since.
Like with other payment apps, you must connect your Venmo account to a payment source such as a bank account or a credit card (note that credit card-backed payments will incur a fee). Or, you can keep cash in your Venmo balance and use it for transactions.
[Read: Best Online Banks.]
How Does Venmo Work?
To use Venmo, you have to download the Venmo app on your smartphone and create an account. You’ll have to link a payment source.
Once you set up your account, you have the option to sync your contacts so that you can easily find your family and friends who are using Venmo.
Venmo also has a debit card that you can sign up for through the app, which allows you to pay for things using your Venmo balance, but with a traditional card experience.
How to Send Money Using Venmo
The primary use of Venmo is to send or receive money between friends. If you want to split a check at dinner, you can Venmo your share to whoever is paying by cash or card. To send money or request that someone pay you, just follow the prompts in your app:
1. Tap Pay/Request.
2. Search for the person you want to pay or get paid from. If they are not already a Venmo friend, you can search using their phone number or email address.
3. Enter the amount. You can also add an optional note.
4. Tap Request/Pay.
You can also pay (or request payment from) multiple people at once using Venmo. Just add multiple recipients (choose the plus sign icon to add additional recipients as needed), and make sure you have all the correct Venmo accounts.
Your payment note will be sent to each person, and the total amount you enter will be split evenly (though you can customize the amounts if you wish).
[Read: Best Checking Accounts.]
What Does it Cost to Use Venmo?
Venmo is free to set up and there are no monthly fees. Sending money is also free if your payment source is a linked bank account, a debit card or your Venmo account.
The only time you will have to pay a small fee is if you choose to send money from a linked credit card. For those transactions, you’ll incur a 3% fee.
Who Can Use Venmo?
Venmo is a U.S.-based app, so therefore, you must be physically located in the country to use it. You also need to have a U.S.-based cell phone that has text messaging and can support the Venmo app. Venmo users must also be 18 years old (or the age of majority in your state).
How to Use Your Venmo Balance
If you keep money in your Venmo account, there are a few things you can do with it:
— Send a payment to someone on Venmo.
— Purchase something on an authorized merchant’s app or mobile website.
— Make an in-store purchase at a merchant that offers a Venmo QR code at checkout.
— Use your Venmo Mastercard Debit Card (if you choose to get one), anywhere Mastercard is accepted.
One thing worth noting is that you can’t use your Venmo balance to make a partial payment. So if you want to send $25 to someone but only have $15 in your Venmo account, you can’t pair it with an additional $10 payment from your bank.
[Read: Best Savings Accounts.]
Is it Safe to Use Venmo?
One of the key benefits of using Venmo is that transactions are encrypted. That means when you send someone money or make a purchase, you can protect the details of your bank account or actual payment method.
There are also security features built in to help you make sure that you are sending money to the correct account, such as having to verify the recipient’s phone number.
Venmo Privacy Settings
Venmo is meant to be a social app, so many users are OK with their transactions showing up in an activity timeline. People like to get creative with fun GIFs and emojis, for example. However, there are privacy controls so that you can choose which of your transactions you want kept off of the public timeline or the timelines of your friends.
Venmo Alternatives
If you’re not into the idea of a “social” payment app, there are other alternatives to check out.
Apple Cash
If most of your family and friends are iPhone loyalists, Apple Cash can be a convenient way to send and receive payments. And you can even do it through text messaging. You can also use your Apple Cash balance to make purchases anywhere that accepts Apple Pay. And although there is a Venmo Teen account option, Apple Cash is a less clunky way for families to send each other money. For one thing, Venmo Teen Accounts can only be managed or connected to one adult Venmo account, whereas with Apple, you can set up a family sharing plan and set limits and controls for each member.
The verdict: Apple Cash is a great option for Apple users and Apple Pay is more universally accepted by merchants than Venmo. However, with Venmo, you can use any app-supporting phone, which makes it more versatile if you or your social circle prefer Android devices.
Cash App
Cash App is a money-transferring app that also lets you keep a cash balance in the app and links out to your chosen funding sources. What sets Cash App apart from Venmo is that it can be used internationally. This can be useful if you do a lot of traveling or have family and friends or do business abroad. Cash App also lets users send and receive alternative payments like stocks or Bitcoin.
The verdict: If you want a payment app that goes beyond U.S. borders, or you like to dabble in digital currencies, Cash App is worth considering. But in the U.S., because there are far more Venmo users than Cash App users, Venmo is more likely to be the payment app of choice within your social circle.
PayPal
Like Venmo, you can use PayPal to send and receive money and make purchases — all backed up with your payment methods of choice. PayPal also offers more advanced financial tools and services for small businesses.
The verdict: You can’t beat PayPal’s scope and popularity, considering that it has 434 million active consumer and merchant accounts worldwide. However, Venmo’s social media-esque feel has driven a high adoption among younger payment app users who want a simpler platform, with 22% of 25-34-year-olds using it.
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How to Use Venmo originally appeared on usnews.com
