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It’s all the rage, all the kids are doing, step outside and you’re bound to hear “Venmo me.” Venmo has become a part of everyday culture, the app has transformed how people send and receive money. Now more than ever, peer-to-peer payment apps are becoming increasingly vital. Cash is no longer King. So how does Venmo make money? Does Venmo charge a fee? We break it down below, so you can use the app without encountering any venmo fees.
As mentioned above Venmo is a peer-to-peer payment app. Which allows individuals to directly exchange money easily and quickly. The app was founded in 2009, by 2012 Venmo introduced the social network aspect of the app. Venmo was acquired in late 2012 for over $26 million. Within a year, PayPal paid $800 million for the app.
Venmo is an app that can be downloaded to your mobile device, then used to send or request money between individuals. Simply input your credit card, debit card, or bank account information to be able to transfer or request money. Essentially, Venmo acts as the broker between two banks, facilitating the transfer of money.
So how does Venmo make money? There is no charge to individual users when drawing from your bank account or Venmo balance. There are Venmo fees associated with using a credit card, 3% will be charged. However this is not a Venmo fee, but rather a credit card fee that Venmo passes on to the user.
The only time Venmo charges the user a fee, is when you choose instant transfer. The Venmo fees are one percent with a maximum fee of $10. Normal bank transfers take 1-3 days, and are free.
Venmo makes money by charging their merchants, over two million and counting. Additionally, Venmo makes money through their Venmo debit card which withdraws money directly from one’s venmo account balance. Venmo fees include a 2.9% fee, plus $0.30 per transaction, all passed on to the merchant.
Given the social nature of Venmo, paired with providing your banking information, can make one quite nervous. So is Venmo safe to use? Yes, but you should take a few precautions when using any sort of online platform. These include, making sure your password is complex, avoid logging in on public networks, and never share your login information.
If you want to really protect yourself, here are a few more tips on how to avoid identity theft.