The Social Side Of Venmo
Venmo has dominated the P2P payment market by making the transfer of funds a fun and interesting exercise. Users can jazz up the exchange by using emojis to describe the traded items in question. For example, if one friend fronts his pal the cost of a glass of wine, the friend can issue a Venmo payment, with the addition of a wine glass emoji, as a playful gesture.
This takes the awkwardness out of asking your friend to pay back their portion of the bar tab, marrying the social element and the financial element, explains Venmo spokesman Josh Criscoe.
Who This Card Is Good For
The Venmo card is a bit of a conundrum. At first glance, its easy to think that it would be a viable option for consumers who dont or cant have a bank account. But without the ability to load cash for instant access or set up direct deposit with the Venmo card, it isnt a full-fledged checking account alternative like a good prepaid card can be.
The Venmo app can be great when you need to pay for things that you cant typically use a card for situations like needing to split a restaurant bill with friends or paying the babysitter.
So who is this card good for? The Venmo card could come in handy for people who need access to their Venmo funds quickly and dont want to pay the instant-transfer fee. A college student, for instance, who relies heavily on Venmo transfers from family or friends may find value in this card.
But students studying abroad will want to stay away from the Venmo card since it cant be used overseas. And if youre a student who cant wait a day or two for your Venmo balance to transfer to your checking account, you may just find it simpler to stick with your banks debit card.
Add A Debit Or Credit Card To Fund Your Venmo Account
You can also add a debit or major credit card to your Venmo profile, allowing you to make purchases through the app that are paid by your card.
Select the Profile icon from the bottom menu.
Go to Settings and tap Payment Methods.
Choose Add bank or card… and then tap Card.
Enter your card information manually or with your phone camera.
Entering a credit or debit card doesn’t require micro-transfers to verify the source, so it’s the faster of the two options if you’re in a hurry to make a Venmo purchase.
Users should know that credit cards are subject to a 3% fee in Venmo unless they’re used at a Venmo-approved merchant.
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Are Venmo Payments Protected Against Loss Fraud And Theft
Under new rules, Venmo payments fall under the Electronic Funds Transfer Act, says Saunders.
These are the same regulations that cover debit cards. In cases of unauthorized charges on your Venmo account, if you report the problem to Venmo promptly say, within 60 days you are protected.
However, this most likely wont cover instances of fraud where you sent the money only instances where someone else accessed your account without your knowledge or permission.
If you sent money via Venmo for something that turns out to be a scam , that transaction is not covered under law, says Tetreault. Youre out the money.
Tip: Dont use Venmo to pay anyone you dont personally know or to pay for merchandise you havent received or verified even if you know the seller. And never use it to buy or sell merchandise unless the merchant has been authorized by Venmo.
So You Can Avoid Losing Funds
Money transfer apps make sending and receiving money simple, but is Venmo safe? That may be the most important question you have about using this money transfer app. If youre looking for peace of mind where your finances are concerned, its helpful to understand Venmos security features and how they work.
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Fund Venmo Payments With Your Credit Or Debit Card
With Venmo, you can also make payments using your credit or debit card, but like with many other online services, you have to first set it up by providing some basic card information.
To get this done youll need to:
- Tap the menu button
- Continue to Settings then go to Payment Methods
- Select Add bank or card and go with the Card option
- Choose whether to add your card information manually or with your phone camera
Its advisable to have contact information for the support agents of the issuer of your card. This is because sometimes your card may be rejected during verification due to a recent zip code or address change.
Keep in mind that Venmo doesnt allow you to update specific pieces of information related to a card youve added. For instance, if your cards expiry date is adjusted, youll have to delete that card then register it afresh with the new information³.
Venmo also intends to roll out a feature that allows two users who share ownership of a debit card to jointly use it on the platform.
Whats The Best Credit Card For Venmo
Paying with is often more convenient and comes with benefits, including fraud protection, the chance to earn rewards, and the option to pay for your purchases later though you will likely owe interest if you don’t pay off your balances when the monthly statement comes.
But be careful when you use Venmo, as theres that 3% fee when you send money to people using a credit card. Also, pay attention to how your card company treats Venmo transactions. Some categorize Venmo payments as cash advances, which would mean you’d likely be charged an additional cash advance fee of up to 5%. Cash advances also typically come with a higher interest rate than regular purchases and interest starts accruing right away. Interest on purchases doesnt typically accrue until youve missed a monthly payment.
Because of the added costs you could incur, its typically not recommended to use credit cards with Venmo unless the rewards you earn outweigh the fees. For example, hitting the minimum spend requirement for a welcome offer worth tens of thousands of points or miles might be enough reason to use your credit card on Venmo. But generally, this makes sense only if you dont have other ways to meet the minimum spend requirements.
- Bills and utilities
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Is The Card For You
Although heavy users of the Venmo payment app might find it appealing to earn credit card rewards within that ecosystem, its likely that other cash back cards will net you more value overall without the extra step of going through a peer-to-peer payment app. A flat-rate earnings card or one with a more generous tiered rewards structure will probably score you greater overall returns.
Venmo Vs Paypal: Limits
For those wanting to make very large transfers, PayPal offers a strong advantage. Single payments are generally allowed up to $10,000 each, with a total cap of $60,000. Thats significantly higher than Venmos limit of $6,999.99 per seven-day rolling period, including a maximum of $4,999.99 in person-to-person payments. Be aware that an identity verification step is required to access these limits. Until then, the maximum transaction amount is capped at $299.99.
Who Should Use Venmo Or Paypal
For those making primarily personal payments to someone they know and trust, Venmo is the ideal choice. With its social interface, making payments with Venmo and seeing exchanges among your contacts feels like a friendly and personable arena.
PayPal can also be used for paying your friends and family. Whichever platform is best for you will depend on which one more of your contacts are using.
But if youre selling products, or are regularly paying for online purchases, a PayPal account will serve you much better. Though Venmo has begun to establish a Venmo Business account, it is still a fledgling service.
In contrast, PayPal has been serving merchants and small businesses for more than two decades, and offers the richest menu of merchant supports of any digital payment app.
Heres How To Use A Credit Card On Venmo:
- Tap the icon that looks like 3 horizontal lines in the upper left corner of the app.
- Hit Settings, then Payment Methods.
- Tap Add bank or card and then tap Card.
- Enter your card number, expiration and security code manually, or with your phones camera.
If youd like to set your credit card as your primary funding source for Venmo, theres an option for that under Banks & Cards. Then, any time you want to send money with Venmo, your credit card will be the default. As always, though, just be mindful of how much of your credit line youre using.
Lastly, if youre wondering about the best credit card to use on Venmo, you should look for a card with consistently valuable rewards.
How To Protect Yourself
Users can take the following precautionary measures to combat hacking:
- Never store large amounts of money in Venmo balance.
- Immediately transfer Venmo transactions to linked bank accounts.
- Only use Venmo to exchange funds with familiar people.
- Opt out of Venmos social network, by changing the setting to private, in order to cloak transaction histories. Otherwise, Venmo’s default new account setting of public, enables the app to publish transactions on its public feed.
Whats The Design On The Card What Does It Do
The QR code printed on the front of your Venmo Credit Card is unique to you. Its the same personal QR code found in your Venmo app. If another Venmo user scans this code, theyll be brought to your Venmo profile where they can send or request money from you. The QR code also allows you to activate your card without calling a phone number just scan the front of your card when you receive it. Easy peasy.
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How Long Does It Take To Send And Receive Money On Venmo
Once money is sent, it shows up immediately in the recipients account, and can be spent using either the Venmo app or the Venmo debit card, or sent to a users linked bank account.
However, not all transfers are immediate. If you are adding to your personal Venmo balance from your credit card, debit card or bank account, it can take between one to three business days to complete the transaction. The opposite is also true: if you want to make a deposit from your Venmo account to your bank, it can take between one to three business days for the money to show up.
Choosing The Right Digital Payment App Depends On The Types Of Exchanges Made
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When you need to send someone money or accept a payment from them, theres no shortage of digital options at your disposal. The two giants in the space, however, are PayPal and Venmo, to the point that each has come to be used as a verb, as in PayPal me or Venmo me.
How to wisely choose one over the other largely depends on the kinds of transactions you want to make and the parties with which you want to exchange funds. For instance, personal transactions with people you know, such as paying your babysitter or splitting a restaurant bill with friends, are particularly well-suited to Venmo, where you can also make your payments a more social affair.
Meanwhile, PayPal is the leading choice for transactions that are more purchase-oriented, such as buying from merchants or accepting payments from your own customers. In terms of business payments, Venmo is geared more towards peer-to-peer transactions and PayPal is more a business-to-consumer platform .
But there is a fair bit of overlap between the two payment services. To help you choose between them, weve dug into the details on features, fees, speed, and versatility, giving you all the information you need to make your own smart choice.
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Venmo Vs Paypal: Additional Features
As you can see, the two services present fairly similarly on basic features and fee structures. But there are a few areas in which the two apps differ markedly. For instance, with its strong focus on transactions between people who know each other personally, Venmo hosts a social feed of transactions that have taken place among people you know, as well as those of strangers, if you opt to view the public feed.
A scroll through the feed of transactions by your Venmo friends will show you who paid who, and with whatever note they shared. The only thing missing is the amount. The feed also supports emojis, which are almost more common than text in the Venmo social feed. When you make your own transactions in the app, sharing them publicly is the default, but you can change this to viewable only by your Venmo friends or only by the recipient, either globally or on a transaction-by-transaction basis.
Where PayPal stands out against Venmo is in its ability to be used by merchant sellers who are accepting payments, as well as shoppers and buyers at online and physical retailers. Originally established as the payments provider for eBay, PayPal excels in enabling transactions between people who dont know each other, including offering protections for both sellers and buyers that Venmo doesnt provide.
Does Venmo Offer Its Own Cards
Starting in June 2018, Venmo began offering its own branded Mastercard debit card. Issued by The Bancorp Bank, the card includes a rewards program, allowing users to opt in to the deals they want and get cash back often 3% to 5% at select stores and retailers.
The card lets customers spend their Venmo balance in-store and online anywhere Mastercard is accepted in the U.S., says Sinlao. They can also make free ATM withdrawals through the MoneyPass network.
Venmo also launched a Venmo Credit Card with cash back rewards in October 2020 through Synchrony Bank.
Customers automatically earn cash back on the categories where they spend the most, earning up to 3% back on their top spend category, up to 2% back on thesecond highest and up to 1% on all other purchases, says Sinlao.
The cash back categories are groceries, bills and utilities, health and beauty, gas, entertainment, dining and nightlife, transportation and travel. The card is currently available by invitation only, says Sinlao.
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How Does Venmo Work
To send and receive money through Venmo, you need to set up a Venmo account, and you can use the Android or IOS app to get started. There is no web browser option for Venmo you have to use the mobile app to send money, receive money and make purchases
Now, lets look at the main ways you can use Venmo.
Send money to family and friends. Venmo is a peer-to-peer money transfer service, meaning that you can use the service to send digital payments to family and friends. If you and your friends order takeout, for example, one person can pay for the entire takeout order and everyone else can pay them back through Venmo. You can even use Venmo to request money from people if you loan money to a sibling, for example, you can send them a payment request through Venmo. Roommates often use Venmo to split the cost of shared household expenses.
Make purchases online. Since Venmo is owned and operated by PayPal, it shouldnt surprise you that many online merchants accept Venmo as payment. If you see a PayPal button during checkout, you might have the option to pay with Venmo, as well. Some merchants even offer a Pay With Venmo button on their payment pages. When you make purchases online using Venmo, there are no fees even if you use a credit card.
You can fund your Venmo account with credit cards or your checking account, and you can fund money transfers with a credit card, debit card, prepaid debit card or a checking account, but not a savings account.
Tips For Maximizing Your Venmo Card
If youve decided the Venmo card is the right choice for you, use the following tips to make sure youre getting the most out of it:
- Keep an eye on the cards cash back offers and use it when youre shopping with eligible merchants.
- Watch your Venmo balance and ensure your linked bank account has enough funds to cover the transaction so you dont get hit with an overdraft fee.
- Avoid withdrawals that can trigger fees.
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Information To Know When Using The Credit Card Linking Feature On Venmo
- Venmo charges 3% for individual credit card transactions
- However, when you buy from Venmo partners, there is no charge
- You cannot transfer your money to a credit card
- In the process of linking or using a credit card, if you encounter a transaction error, you should contact the card issuer to resolve it. Usually its because you entered the wrong ZIP code or the cards expiration date is wrong
- If you incorrectly updated your card information, remove it from the link and do it again