March 5, 2018

Venmo for Business Review

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Known as a peer-to-peer payment service, Venmo is slowly making headway into the business world.

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Venmo began in 2009 as an intuitive way to send money to friends and family. Owned by PayPal, it's a mobile only app users with an iOS or Android device can use. Today, more than millions of retailers accept Venmo as a part of their mobile checkout options.

If you operate solely online and have a mobile app, you may want to add Venmo to your supported list of accepted payments.

While users use Venmo to pay friends and family, it's quickly becoming a familiar way to buy online products or services. Consumers link a bank account, debit, or credit card to their app and pay businesses (or peers) directly.

Venmo is forward-thinking in its use of a social feed, where not only the user sees the purchase, but also anyone who scrolls through the overall feed.

The fees seem in line with most other online transaction costs. Keep reading to see how Venmo may or may not benefit your business.

Who Is Venmo Best For?

  • Mobile businesses selling goods or services online: Venmo flat out states their app is not for use for in-person purchases. It's strictly an app for online purchases. However, you have to become a Venmo partner in order to qualify.

  • Businesses looking for marketing opportunities: Venmo's social feed is almost like free marketing. Not only does the app keep track of purchases and share them on their overall feed, users can share their purchase with their friends on the app via their personal feed. It's like word-of-mouth taken to a new technological level.

  • Businesses that sell to millennials: Many millennials don't use PayPal; they are turning to more modern options, such as Venmo. While PayPal and Venmo partnered up (see below), it may benefit you to accept Venmo payments directly in your mobile app to appeal to the younger crowds.

Reasons Why We Like It

  • Works with PayPal: Even though millennials might not use PayPal, a lot of consumers do use it. Merchants with a PayPal account can automatically accept Venmo payments. The downside is that consumers must leave your website to go to the payment portal. The upside is that you get the marketing and appeal to the younger crowds. The fees are the same as you already pay to PayPal. You just get another way to accept payments.

  • Consumers can use a credit card free of charge: Venmo charges a 3% fee when consumers pay with a credit card. This is only for peer-to-peer payments, though. If they make a purchase with an authorized retailer, it's free for consumers. You, as the business, pick up the tab by paying the transaction fee (see Fees).

  • Split the tab: If you operate a business that offers products that people may go in on together (think gifts or services), Venmo makes it easy to split the tab right there. Each responsible party can pay their portion and no one has to serve up an "IOU."

  • Social feed: Market directly to those consumers in the mobile audience. You can get additional exposure just by a few people making a purchase from your business. It's similar to Facebook or Instagram users sharing their transactions with their friends, but with less interference from other posts that have nothing to do with business transactions.

  • Influential purchases: Many people are influenced by the purchase decisions of others. Enter Venmo, where users can share as much as they want about their purchase, including the use of the ever-popular emojis. While it's not proven, it could lead to more sales just because someone's BFF made that same purchase.

  • Automatically an option for current users: People who have the Venmo app installed on their phone will be notified of the ability to pay with Venmo while making a purchase on partner apps. This could be a driving force for the final decision to purchase for those who regularly use their phone for purchases.

Reasons You May Want to Look Elsewhere

  • You need a full POS: Unlike many other platforms accepting payments, Venmo doesn't have any additional benefits. This includes invoicing, recurring payments, coupons, or discounts. It's strictly a way to accept payments, giving you more exposure to those preferring the mobile world.

  • You aren't a partner business: If you are a business, don't accept Venmo without getting approval from the other business first. Anything resembling a business transaction outside of the approved businesses may result in reversed transactions, which may cost you a lot of money and business in the end.


As a peer-to-peer service, Venmo is free for users who use a debit card or bank account. If they pay with a credit card, though, users pay a 3% fee.

However, if they pay you as a partner business, consumers can use any type of accepted payment. Venmo charges businesses 2.9% of the transaction plus $0.30. The good news is that there are no monthly subscription fees, annual charges, nor minimums you must meet.


The Venmo app is mostly for the consumer or the person paying the bill. As a business, you'll conduct your Venmo transactions through PayPal, securing your funds in the same manner you have all along.

As stated above, Venmo doesn't provide any type of back-office, nor does it support any features for businesses other than accepting payments.

However, the Venmo app is free to download and use, making it a favorable option to offer your customers who prefer mobile purchasing.

How Venmo Makes Money

Venmo makes their money from the fees they charge. From a business perspective, each purchase transaction costs the business 2.9% plus $0.30. However, Venmo also makes money off peer-to-peer transactions made with a credit card. It might not seem like a lot, but the money adds up over time, especially with millions of users on a daily basis.

How It Compares

  • PayPal: While PayPal owns Venmo, they also have their own platform for business owners. The PayPal business app allows you to create invoices, capture customer information, and track transactions on-the-go. If you need more capability than collecting payments, PayPal offers more options.

  • Square: If you need to collect in-person payments, Square offers more options, including the mobile credit card reader. You can manage customers, book appointments, and even keep an eye on inventory with the Square app.

  • Stripe: If you are a developer or have one on staff who can customize your app for you, Stripe is a good choice for online businesses needing a low-cost payment processor. It offers other features rather than just collecting payments, as Venmo does.

Bottom Line

Venmo is still making its way into the business world. If you are lucky enough to be accepted as a Venmo partner, you stand the chance to market to millennials who prefer today's high-tech payment methods. It still leaves a little to be desired in terms of security and it doesn't offer any other features that other payment processors offer, though.

If you are strictly looking for another payment option to offer your customers, it could be beneficial, especially since you only pay per transaction.

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