What Is Venmo & How Does It Work?: Essential Guide 2024 (2024)

Venmo is an app you can use to send and receive cash to and from friends. You can even use it for business purposes, such as paying for goods and services. If, for example, you want to split a rideshare fare, you can easily pay your share through Venmo. Alternatively, if your friend forgot to pay what they owe you for dinner last night, you can use this mobile payment service to send them a request for the required funds.

Venmo isn’t the only app that lets users send and receive money. Several alternatives—including Cash App and Paypal—offer similar services. Before signing up for any of these apps, it’s a smart idea to learn how they work, as well as the benefits and drawbacks of using them.

Paypal

Venmo

Cash App

Fees

From free to 5%, depending on transfer type

From free to 3%

Free to 1.75%

Max transaction limit

Up to $60,000 per transaction for verified accounts

Up to $5,000 per transfer to your bank, up to $10,000 per week into your Venmo account

Up to $1,000 per 30-day period for unverified accounts, may be higher for verified users

# of countries

200+

1

2

How does Venmo work? Send and receive money in 6 easy steps

Venmo is meant to be used on a mobile device and help you split checks or pay for items you would normally purchase with cash. That way, you don't have to worry about having exact change on hand or anyone using not having cash as an excuse not to pay for something.

You can send or request money through Venmo using the following steps:

  1. Set up your account: You can open a Venmo account through your computer, but it’s easier through the mobile app. You’ll be prompted to provide information such as your name, email address, and phone number. Once your account is open, you can choose to customize it by adding a profile picture, modifying privacy settings, or changing your username. To send money and transfer it out of Venmo, you will need to link a bank account.
  2. Open Venmo and hit the “Pay or Request” button: Whether you use the app or website, the button will be blue with a V, similar to Venmo’s logo.
  3. Identify the person you want to pay: You can search your friends list for the person's username, scan their Venmo QR code, or use their email or phone number. Before moving to the next step, make sure you have selected the correct person.
  4. Choose an amount to send or request: You will be prompted to enter the amount you want to send or request. As you scroll down, there is a space for you to mention the reason you’re sending or requesting payment.
  5. Check your privacy level: Check your privacy settings if you don’t want anybody to see your transactions or just want your friends to see them. This is an optional step.
  6. Confirm transaction: Choose either request payment or make one and confirm this is what you want to do. You should receive a confirmation via email that the payment or request has been made.

Venmo pros and cons

There are many different cash apps and it can be easy to get bogged down choosing which one you should use. Before downloading one, consider the benefits and drawbacks of using Venmo.

ProsCons
  • Safe to use
  • Fast and convenient
  • Can sign up for a Venmo debit or credit card
  • Can use at select businesses
  • Not every transaction is free
  • Can’t cancel payments
  • No international payments or requests

How does Venmo make money?

Venmo primarily makes money through fees, such as when users pay with their credit card or want to request an instant bank transfer. Venmo also charges fees with their cards. For instance, if you withdraw money from a Venmo debit card at a bank or out-of-network ATM, you’ll pay $3 or $2.50, respectively.

How much does it cost to use Venmo?

Venmo is free to use if you decide to stick with standard transfer times and make payments through your bank account or debit card. Otherwise, there are some fees you may have to pay, depending on which services you use.

Charges you may come across include:

  • Instant transfer: You can either send money using the standard service and wait one to three days for it to arrive or pay for money to be transferred instantly to your bank account. For the quicker option, you'll be charged 1.75% of the amount transferred, with a $0.25 minimum up to a maximum of $25.
  • Credit card transfers: You can send money to others using your Venmo balance, debit card, or through a bank transfer for free. However, there is a 3% fee if you want to send people money using your credit card.
  • ATM fees: If you have a Venmo debit card, you'll be charged a $2.50 fee for out-of-network ATM withdrawals and a $3 fee for an over-the-counter cash withdrawal.
  • Cashing checks: You can deposit checks into your Venmo account. However, you will be charged anywhere from 1% to 5% of the amount you deposit (with a $5 minimum) depending on the type of check you deposit.

Is it safe to use Venmo?

Yes, it is safe to use Venmo. The app uses encryption to ensure your sensitive information is kept secure, and it monitors your account for any unauthorized transactions. You can also set up a PIN code in Venmo to help add an extra layer of protection and prevent others from hacking your account.

You need to be particularly careful about scams. Scammers will try to get you to pay them using Venmo or try to trick you into giving up your Venmo information in order to access your account.

Venmo cards

After opening a Venmo account, you may be offered a Venmo debit or credit card. These cards can be useful, although it’s important to learn how they work before accepting and using them.

The Venmo Mastercard® debit card

The Venmo debit card allows you to make purchases using the funds in your Venmo account. You can earn cashback with all qualifying purchases, and the rewards are deposited in your Venmo account. You can also choose the color of the card and get an up to two-day advance on your paycheck.

The Venmo credit card

Upon approval after a credit check, you can earn up to 3% cash back on certain spending categories, 2% on another one of your choosing, and 1% on all other eligible purchases. There are no annual fees, and the categories you can choose from are fairly common, including travel, groceries, and dining.

How Venmo stacks up

As already mentioned, there are many other apps similar to Venmo you can use.

Paypal

Venmo

Cash App

Fees

From free to 5%, depending on transfer type

From free to 3%

Free to 1.75%

Max transaction limit

Up to $60,000 per transaction for verified accounts

Up to $5,000 per transfer to your bank, up to $10,000 per week into your Venmo account

Up to $1,000 per 30-day period for unverified accounts, may be higher for verified users

# of countries

200+

1

2

Venmo vs Paypal

Venmo and Paypal allow you to send funds to friends and family using a computer or mobile device. The main difference is that you can send money internationally with Paypal, whereas you can't with Venmo. Both apps charge similar fees (such as for instant transfers) and have debit and credit card offerings. Where Venmo shines is in its transfer times—free standard transfers take anywhere from one to three days, whereas Paypal takes around three to five.

While Venmo transfer limits are lower than Paypal, it may not be a dealbreaker if you don’t intend on sending or receiving large sums of money within a short period of time. Since Venmo is only available in the U.S., it’s best for those located in the country and sending money to friends and family.

Venmo vs Cash App

Cash App is also a peer-to-peer tool that lets you send and receive money. The fees are similar to what you’d pay with Venmo and it also offers a debit card. You can also use Cash App to invest in stocks and bitcoin.

TIME Stamp: Venmo is convenient but watch out for the fees

Venmo is one of the best cash apps, making it a convenient tool for those who want a low cost way to send and receive money.

The app is simple to sign up for and use, and the fees are made clear on Venmo’s website. Where it could get murky is with the credit card interest charges. Though hard to predict the exact amount you’ll pay, Venmo does show you what the annual percentage rate (APR) is, and your bill should offer more information as to other charges.

If you stick to sending and receiving money through a standard bank transfer and don’t exceed Venmo’s limits, you won’t have to pay any fees. If you want more, make sure you check out how much your transaction will cost before proceeding.

Frequently asked questions (FAQs)

How does Venmo work when someone pays you?

The person paying you will either send you money using your Venmo username, QR code, phone number, or email. Once the funds are released, you’ll need to accept them before they go into your Venmo account. The money will remain in your Venmo account until you transfer it to your bank account or use the balance for other transactions.

When someone sends you money on Venmo do you have to accept it?

No, you don't have to accept the money someone sends you on Venmo. If you don't do anything, the funds will be sent back to the sender after three days. The same goes for if you try to send someone money and they don't accept it.

Can everyone see who you send money to on Venmo?

That depends on the privacy settings you have. Venmo allows you to set your transaction activity to public (anyone can see it), friends only, or private (only you and the recipient can see it). The default setting is public.

The information presented here is created independently from the TIME editorial staff. To learn more, see our About page.

What Is Venmo & How Does It Work?: Essential Guide 2024 (2024)

FAQs

What is Venmo and how does it work? ›

Venmo is a mobile app for peer-to-peer, or P2P, money transfers and payments. It's known for its timeline feed where you and your connections in the app can send payments to each other with emoji messages, but don't worry: The dollar amounts of transfers always remain private.

What is the downside to Venmo? ›

Potential scams and hackers.

The biggest downside to using Venmo is the potential for your money to be stolen. If a hacker gains access to your Venmo, it's pretty easy to change the associated bank account – so the hacker could change the account to their own and transfer the money in your Venmo to their bank.

Can Venmo take money from your bank account? ›

Payments are automatically deducted from your balance, or if your balance doesn't cover the amount, they're deducted from your linked bank account. If a retailer doesn't accept payments through the Venmo app, they likely accept the Venmo Mastercard debit or Visa credit card. Identity Theft Protection Software can help.

How do you use Venmo for beginners? ›

Here's how to send or request money from the Venmo app:
  1. Tap Pay/Request at the bottom of the screen.
  2. Search and add the person you want to pay or charge.
  3. Enter an amount and add a note.
  4. Tap Request or Pay.
Oct 3, 2023

Do you need bank account for Venmo? ›

Venmo has its own debit card called a Venmo debit card or simply Venmo card. The convenient thing is that it doesn't require getting a bank account.

Is Venmo as safe as cash? ›

Generally, we can say that your funds with Venmo are safe. That being said, there are associated risks, and while these risks may not originate from the payment app itself, the consequences may directly affect Venmo users. We're talking about scams and fraud committed through the app by cybercriminals.

When should you not use Venmo? ›

Do not use Venmo to pay or receive payments from people you don't know, especially if the payment involves the purchase or sale of a good or service.

Why do people not use Venmo? ›

Security Risks: While Venmo has implemented security measures, no system is entirely immune to risks. There have been instances of fraudulent activity and unauthorized access to Venmo accounts. Users have reported cases of funds being stolen or accounts being compromised.

Is it safe to link Venmo to a bank account? ›

Linking bank accounts to Venmo is generally safe, but not without risks. You should implement extra security measures when linking bank accounts or credit cards to Venmo, such as setting up multi-factor authentication on both your Venmo app and your online bank accounts.

Does Venmo check your bank account? ›

Venmo uses Plaid to verify your bank account information and, periodically, your bank account balance to check if you have enough funds to cover certain transactions.

Does Venmo charge a fee? ›

Venmo is a free payment platform when transferring money between private parties and has options to fund transactions via credit card for a small fee. It's also free to use to pay for purchases in-store (but not by tapping into a credit card.)

Can banks cancel Venmo? ›

Will Venmo Refund Money If You've Been Scammed? In most cases, the answer is no. There is no way to cancel a Venmo payment once it's been sent. Venmo also typically doesn't get involved in financial disputes between users (instead, you're better off contacting your bank).

How do I use Venmo for the first time? ›

How to Sign Up for a Personal Venmo Account
  1. Download one of our mobile apps: iOS & Android (Venmo does not have a Windows app)
  2. Open the Venmo app.
  3. Choose your sign-up method and create a secure password (between 8 and 20 characters long, and should contain at least one number or symbol like !
Jun 11, 2024

How does someone pay me on Venmo? ›

To receive money:
  1. Give your Venmo user name or the email or phone number associated with your Venmo account to the sender.
  2. Or supply them with your Venmo scan code in person or via text, email or AirDrop (iOS only)
  3. The money will land in your Venmo balance.

What are the pros and cons of Venmo? ›

Consider these pros and cons.
  • Pro #1: Parental Monitoring. Venmo, intended for teens ages 13-17, functions as a debit card. ...
  • Pro #2: Cashless Convenience. ...
  • Pro #3: Real-Time Notifications. ...
  • Pro #4: Access to Venmo App. ...
  • Pro #5: Privacy. ...
  • Con #1: ATM Withdrawal Fees. ...
  • Con #2: Other Fees and Restrictions.
Mar 14, 2024

Is Venmo safe to link to a bank account? ›

Linking bank accounts to Venmo is generally safe, but not without risks. You should implement extra security measures when linking bank accounts or credit cards to Venmo, such as setting up multi-factor authentication on both your Venmo app and your online bank accounts.

Should I link my bank account or debit card to Venmo? ›

Is it better to add a bank or card on Venmo? Venmo's security applies to both linked bank accounts and cards, so it's up to you to choose which you want to use to add money on Venmo.

What do you need to open a Venmo account? ›

Open the Venmo app. Choose your sign-up method and create a secure password (between 8 and 20 characters long, and should contain at least one number or symbol like !()@#$% Verify your phone number and email address. Add and verify your bank account.

References

Top Articles
Latest Posts
Article information

Author: Gov. Deandrea McKenzie

Last Updated:

Views: 6448

Rating: 4.6 / 5 (66 voted)

Reviews: 89% of readers found this page helpful

Author information

Name: Gov. Deandrea McKenzie

Birthday: 2001-01-17

Address: Suite 769 2454 Marsha Coves, Debbieton, MS 95002

Phone: +813077629322

Job: Real-Estate Executive

Hobby: Archery, Metal detecting, Kitesurfing, Genealogy, Kitesurfing, Calligraphy, Roller skating

Introduction: My name is Gov. Deandrea McKenzie, I am a spotless, clean, glamorous, sparkling, adventurous, nice, brainy person who loves writing and wants to share my knowledge and understanding with you.