Updated May 5, 2021

Venmo for Business Review

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Merchants can use Venmo to accept payment. But is this social-friendly payment service a good option for your business? Read this review before you get started.

Venmo
Try Venmo business profiles for 30 days

Overall Score

4.0

Price

4.0

Customer Service

3.0

Contract

5.0

Ecommerce

4.0

High Volume Business

3.0

Low Volume Business

5.0
5-point scale (the higher, the better)

Pros and Cons

  • Accept Venmo in-person
  • Expand payment options
  • Simple pricing
  • Must go through PayPal or Braintree for online payments

Bottom Line

Good way for small businesses and freelancers to accept Venmo payments

Originally known as a peer-to-peer payment service, Venmo has also become a big player in business world. Already over 2 million merchants use Venmo.

Venmo began in 2009 as an easy, free way to send money to friends and family. Now people can also use Venmo to check out online or even in-store.

With a social feed showing users' latest activities, Venmo could even be a great way to get some free marketing for your business.

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

What Businesses is Venmo Best For

  • Online businesses: With over 65 million Venmo users, it could be very beneficial to add this additional payment method for customers.

  • Small mobile businesses: Venmo now lets you take in-person payments with a QR code. This is ideal for small local shops, mobile vendors, freelancers who travel to their clients, and those with side hustles.

  • Millennial-targeted businesses: Many millennials and Gen Z don't use PayPal and prefer the more modern Venmo. Accepting Venmo may appeal to the younger crowds.

Venmo Processing Fees

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For online transactions. Venmo charges the same processing fees as PayPal. You will pay 2.9% + $0.30 per transaction. That means if you have a $50 online sale, the processing cost will be $1.75.

For in-person transactions via QR code, the fee is 1.9% + $0.10 per transaction.[1] That means for a $50 retail sale, the cost is $1.05.

Venmo's online processing fee is on-par with Square, Stripe, and PayPal. But for in-person QR code scans, the transaction fee is less. In comparison, Square's per-swipe fee is 2.6% + $0.10.

How to Accept Venmo Online

To be able to accept Venmo payment online, you must go through PayPal or Braintree (which is also owned by PayPal). We'll talk about these in a little more detail below:

Using PayPal for Venmo:
PayPal Checkout lets you add PayPal, PayPal Credit, and Venmo check out buttons. It will redirect customers to a secure checkout page.

PayPal is a third-party payment services provider, meaning that you don't get a merchant account. There's no approval process, so it may be the easier option for new and very small businesses.

However, there are some downsides. Since there's no underwriting, account holds and freezes are more likely if activities are seen as suspicious.

Using Braintree for Venmo:
Braintree is a merchant account provider specializing in online payments. It seamlessly integrates PayPal, Venmo, and other digital wallet checkouts.

Braintree has a strong focus on technology. It has robust developer tools (rivaling Stripe) to allow you to fully customize your online checkout experience.

It's better if you have a developer to make the most of the tools. While PayPal is better if you just need a simple solution that you can implement yourself.

How to Accept Venmo In-Store

To accept Venmo payments in person, you need to create a Venmo Business Profile. To do so, you just need to have a personal Venmo account.

After you've set up a business profile, you'll get a unique QR code for your business. Customers just need to scan your QR code with their Venmo app for a completely touch-free checkout. Venmo does not provide a card reader or other physical equipment.

Your business profile is linked to your personal account, so you don't need to open a new account. Your personal and business transactions are kept separate.

For the first 30 days after setting up a business profile, your seller transaction fees are waived. After that, you're charged 1.9% + $0.10 per transaction.

If you want an in-person alternative that takes card, check out Square. It supports contactless and chip payments, so your customers can have more ways to pay.

You can also purchase QR kits, like stickers, tabletop display, and wallet card. These options let you easily display your QR code for customers to scan.

Reasons to Accept Venmo Payments

  • Expand payment options: Offering Venmo payments could be a way to appeal to the younger customers who are used to paying on their smartphones. Users can pay with their Venmo balance, linked bank account, or linked credit card.

  • Free marketing with the social feed: Venmo's social feed lets users share their purchase with comments and emojis. You can get additional exposure just by a few people making a purchase from your business.

    People can see what their friends have been up to, and may even ask about the purchase. It could lead to more sales just because someone's BFF recommended it.

  • Touch free: For in-person, Venmo lets you accept payments completely touch free. Customers just need to scan your phone or printed QR code.

  • Accept remote payments: You can also send the QR code directly to customers via email or text. This option is good for freelancers who may not personally meet with clients.

  • Consumers can use a credit card free of charge: Peer-to-peer payments with a credit card has a 3% fee. But if a customer is paying a business with a credit card through Venmo, then there's no extra charge. You, as the business, pick up the tab by paying the transaction fee.

  • 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."

Downsides

Here are some disadvantages to beware of. These are mainly for in-person payments using the Business Profile.

  • No tax calculations: If you're accepting Venmo payments in-person for your business, you'll need to do the tax calculations yourself.

  • Not a full POS: You're also not gonna get full POS features. There aren't any features for invoicing, recurring payments, discounts, or refunds. If you need these tools, you may want to go with a more robust payment services provider.

  • No co-owner access: Only the person who created the business profile can access the account. So it's probably best if your business only has a single owner, or single person operating the sales.

  • Not for non-profits: As of now, you cannot use Venmo business profile to collect funds for non-profits or donations. But you can see if PayPal or Braintree will let you integrate Venmo on your organization's website.

How does Venmo make money?
Venmo makes their money from the fees they charge. For merchants, each purchase costs 2.9% + $0.30 for online transactions and 1.9% + $0.10 for in-person QR scans. Venmo also makes money off peer-to-peer payments made with a credit card, which costs users an extra 3%.

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.

 

Venmo

PayPal

 

Benefits and Features

Customer ServicePhone, email, and messaging through the appPhone, Email, Live Chat Support, PayPal Community
Good ForSmall mobile businesses and freelancers who want to take Venmo paymentsAccepting Paypal payments; Small businesses with average transaction under $100
Equipment
None needed
POS (Chip, Swipe, Tap), Marketplaces & Partners, Invoicing, Online Processing
Pricing Model
Flat-Rate
Flat rate
Swipe Rate
1.9% + $0.10
2.7%
Online Rate
2.9% + $0.30
2.9% + 30¢
Monthly Fee
$0
No monthly fees; $30/month for PayPal Payments Pro
Keyed-in Transaction Fee
N/A
3.5% + 15¢
Deposit TimeInstant access to the funds in your Venmo account for in-person payments.Instant access to the funds in your PayPal account; Or instant deposit to your bank account for 1% fee or 1-2 business days for no fee
Chargeback Fee
N/A
$20

Square:
Square is one of the most popular processing providers for new businesses. The per-swipe fee is 2.6% + $0.10, which is more than Venmo's transaction fee for business profiles. But you get a lot more features with Square.

It offers a free mobile credit card reader and a powerful POS app. You can manage customers, set discounts and refunds, and even keep an eye on inventory with the Square app.

 VenmoSquare
 Visit SiteVisit Site
 

Venmo

Square

SPECIAL OFFER
Try Venmo business profiles for 30 days - Learn More

SPECIAL OFFER
Free Mobile Credit Card Reader - Learn More

 

Benefits and Features

Customer ServicePhone, email, and messaging through the appPhone, Email, Live Chat Support, Seller Community
Good ForSmall mobile businesses and freelancers who want to take Venmo paymentsMobile & small businesses with average transaction over $100
Equipment
None needed
Free magstripe card reader; $49 for contactless + chip reader; Stand, Terminal, and Register available for purchase.
Pricing Model
Flat-Rate
Flat rate
Swipe Rate
1.9% + $0.10
2.6% + 10¢
Online Rate
2.9% + $0.30
2.9% + 30¢
Monthly Fee
$0
No monthly fees
Keyed-in Transaction Fee
N/A
3.5% + 15¢
Deposit TimeInstant access to the funds in your Venmo account for in-person payments.Payments before 5PM PT / 8 PM ET is available the next business day
Chargeback Fee
N/A
None
 Visit SiteVisit Site

Try Venmo business profiles for 30 days

Stripe:
Stripe is very comparable to Braintree. Both are great choice for online businesses. Similar to Braintree, it has powerful developer APIs that lets you customize your entire checkout experience.

You can do recurring billing, accept digital wallets from multiple countries, accept ACH transfers, set up flexible payment options, and more. The main difference is that Braintree lets you accept Venmo and PayPal payments, whereas Stripe cannot.

The online transaction fee is also 2.9% + $0.30.

Bottom Line

Venmo is already big in business world. With more and more Venmo users, especially among the Millennial and Gen Z generations, it could be a huge advantage to offer that payment option. To accept Venmo online, just note that you'll need to get an account with either PayPal or Braintree.

Venmo has made it even easier now to accept payments in-person as a business. The transaction costs are competitive so you can keep more profits. But it doesn't offer a full POS, so if your business needs more tools, it's best to go with a real processing provider.

References

  1. ^ Venmo Business Profiles, Retrieved 4/29/2021

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Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

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