If you want to send someone money fast, you have several choices. But the two most popular services that people use more than any other are PayPal and Venmo.
The main purpose of both is the same: to move money from your bank account to someone else’s (or vice versa). However, the process for doing this is slightly different between Venmo and PayPal.
Even if you already know everything there is to know about PayPal, you might be wondering: what is Venmo and is it a better option than PayPal?
What is Venmo?
Venmo lets you instantly send money to someone using a credit card, debit card, or your bank account. A lot of people don’t realize that PayPal actually owns Venmo. Venmo is essentially a simpler alternative payment service offered by the same company.
Adding payment details
Once you’ve signed up for a Venmo account, all you need to do is add payment methods to start sending or receiving money. You will find it in the application menu under payment methods .
Just select Add Bank or Card and fill in the account details in the payment method form.
Once you’ve added a payment, you’re ready to start using the app.
Sending or requesting payments
From the main screen of the app, you can tap the blue Send Payment icon to create a new payment to someone or request a payment.
The other user will need a Venmo account so that you can search for their name or Venmo ID to send the payment.
You will simply need:
- Select the user you want to send money to
- Enter the amount
- Enter the reason you are sending the money (optional)
- Define the confidentiality of the transaction (Private, Friends or Public)
- Select Pay (or then Ask ) to request the amount from this person
You will see this transaction appear on the main page of the application. You can tap on this transaction at any time in the history to view the payment details.
Transfer money to your bank account
Whenever someone sends you money, you’ll see it show up in your Venmo balance. At any time, you can press the Transfer Balance button at the top of the menu to transfer money to your bank account or credit card.
The Balance Transfer page will display your total balance available for transfer. You can make an instant transfer to your bank or credit card for a 1% fee, or allow it to take up to three days at no charge.
Get a Venmo Debit Card
You may have heard of the Paypal Debit Card, which gives you instant access to your Paypal funds for payments at any offline or online store.
Now, Venmo offers the same functionality: the Venmo Debit Card.
You can sign up by tapping Venmo Card from the app menu.
Just follow the wizard to register. You can choose from 4 basic colors. So it’s a Mastercard debit card that works in almost any business. It’s also a Rewards card that lets you earn points every time you use it – and there’s no credit check or monthly fee associated with it.
Venmo vs Paypal: what are the differences?
You may have noticed that Venmo and Paypal have a lot in common. Apart from a very different user interface, the two services are very similar.
One of the main differences is that Venmo is almost like a payment service and a social network combined into one. You can add friends to the service, making it easier to send or receive payments from them later.
Fees and charges
There are a number of other differences, some slight and some significant. For example, here are the differences in fees.
- Venmo charges 3% for credit card payments; PayPal charges 2.9% plus a flat fee of $ 0.30.
- No charge for bank transfers with either service.
- No charge for debit card payments with Venmo; Paypal charges 2.9% plus a flat fee of $ 0.30.
- Venmo has a transaction limit of $ 4,999.99; Paypal only limits transactions to $ 10,000.
- Withdrawing money from your bank is faster with Venmo, which only takes 1-3 days. Paypal withdrawals can take 3 to 5 days.
What is the most accessible?
You can access both services on the same platforms, including the mobile app, or mobile or desktop browsers. There is a big difference that you will notice when you visit Venmo on a browser and sign in to your account.
You won’t see a blue Send or Request button in the lower right corner like you do in the app. This is because with Venmo, you can only send or request payments using the mobile app.
You can still use the website to view your transaction history, update your settings, or request a transfer to your bank account or credit card.
Additionally, Venmo is only available for use in the United States. On the other hand, PayPal is available in over 200 countries.
Paypal is also more commonly accepted in many online and offline businesses.
Venmo being much newer, it is still gaining a foothold.
Being able to pay for things directly in stores using these services means that you don’t have to transfer money to your bank account before you can buy things with your balance.
Send money to people
Without a doubt, the process of sending money to people with Venmo is much simpler and streamlined. Using the Venmo app, it’s actually just a quick three-step process with no confusing options or other choices.
If the user has a Venmo account, you type in the amount, a reason (if you like), if you want to share the transaction publicly, and you’re done. Your user will have to pay a fee to receive the money, but Venmo doesn’t bother you with these details.
Paypal, on the other hand, has Send, Request, Crypto, and More buttons on the main page, mixed with all kinds of other cluttered information in the main dashboard. It is also not very easy to find the link to transfer money to your bank or credit card.
And once you select Submit, the process isn’t a simple form. It is a step-by-step wizard that changes the following options based on your choices and who you are sending money to.
The first step of the wizard seems pretty straightforward.
But after selecting Continue, you’ll see the transaction details which you can apparently change, like the currency, if you’re sending to a friend, and what account you’re sending with.
If you choose to change accounts, you will see that you can use your Paypal account or send directly from your bank account.
Why is there so much choice with Paypal when Venmo is such an easy 3 step process?
This is because Paypal has superimposed itself in more complicated fee structures depending on whether the payments are international and what is paid.
For example, if you send money to a friend, you can choose to pay the charge or have the recipient pay it. Or you can choose to pay for goods or services, in which case the recipient must pay the charges and have them covered by Paypal Purchase Protection.
So, on the one hand, Paypal can offer more features and choices. But Venmo simplifies the entire transaction process by standardizing fees and other details, allowing you to complete the payment process with just a few clicks.
Some other important differences to consider before making your choice between Venmo and Paypal:
- Paypal offers the peace of mind of buyer protection when you buy from a business.
- Paypal offers business loans.
- You can buy or sell cryptocurrency with Paypal.
In comparing Venmo and Paypal, we used two full membership accounts to look at the user interface, transaction process, features, fees, and balance transfers.
Ultimately, Venmo and Paypal do the same. They both receive money from your bank account or credit card and someone else’s. The difference is that Paypal is a bit more complicated to use, but offers a lot more features and services.
Venmo is best for someone who doesn’t want to deal with bells and whistles, and just wants a simple app to send someone money as quickly and easily as possible.