Venmo is a financial platform acquired by PayPal when it bought Braintree for $800 million in 2013. Venmo has competitors, but its reach is huge and its rise meteoric—especially with millennials and younger. In the fourth quarter of 2018, it processed 19 billion U.S. dollars—that’s 80% growth year-on-year.1 Today, it has as many as 10 million users by some estimates.
The Venmo app is representative of the willingness to embrace a new kind of money system. It represents a willingness to trust gadgets on a whole new level, and a lack of concern for financial privacy.
But users—and you whether you’re a user or not—may not thoroughly understand the platform. And while Venmo might look free at first glance, there are many little Venmo charges you could be paying without even realizing it.
Anytime you use a financial platform, it’s important to know what the possible charges and risks involved are. This lets you protect yourself and can save you money.
Venmo makes it easy to pay a friend back for a meal or send money to your child in college. There are almost unlimited uses to this personal payment network, but are you paying Venmo fees every time you use the app? We’ve got answers below.
In This Piece
What Is Venmo?
Even if you’re not familiar with this platform, you’re likely familiar with platforms like it including Square Cash, Zelle and Google Wallet.
Venmo is a type of peer-to-peer payment platform. It’s a mobile app that enables sending money easily among friends. No credit card, no wallet, no fees and no nagging for unpaid drinks required. Just link the app to a debit card and spend away.
You can use Venmo to send and accept payments to or from other people online. Instead of finding the exact change to pay your friend back for dinner or stiffing him/her, for example, you can simply Venmo him/her the exact amount.
You can also use Venmo to pay for goods and services from some online retailers as well as to make in-app purchases in some online apps.
Some businesses even choose to use Venmo to make payments to freelance employees.
Venmo is somewhat unique in that it’s also a social platform. Unless you change the settings, your transactions are visible to the public, as well as your friends on the platform. You can see who’s sending or receiving money from who, and the notes they include about what the payments are for.
Creating a Venmo account is as easy as entering your email and selecting a username and password or using your Facebook account to create your Venmo account.
Easy of account setup aside, Venmo users can probably learn a thing or two by reading the fine print and chatting with more suspicious types.
A Guide to Venmo Charges
Does Venmo charge a fee for its use? It depends on how you use it. Venmo doesn’t charge a fee to set up an account, hold an account or transfer money to others when you have a balance or are funding with your bank account or debit card. Venmo does have fees for some other activities.
Instant Transfer Fees
One time that Venmo charges a fee is when you instantly transfer funds from your Venmo account to your checking or savings account. You don’t pay for standard transfers, which are sent via ACH networks. However, instant transfers are sent via payment card networks and are more expensive.
Venmo fees for instant transfers are 1.75% of the transfer value. The minimum fee is 25 cents, and the maximum fee is $25.
Credit Card Processing Fees
You won’t pay a fee if you send money to other people using your Venmo balance or funds from your bank account or debit card. However, you will pay a fee if you send a payment that’s funded by your credit card. The fee is 3% of the total transaction.
If you use Venmo as a business or charity, you pay merchant fees. These are seller transaction fees that occur each time you receive money for goods or services. Even if you’re a personal Venmo user, you may pay these fees if someone identifies a payment to you as being related to goods or services.
Seller transaction fees are 1.9% of the transaction plus 10 cents. To get an idea of how much these fees might be, consider the table below.
|Transaction Amount||Seller Transaction Fees|
Venmo charges a fee if you use your Venmo balance to buy cryptocurrency. If you sell cryptocurrency and receive the funds from the sale in Venmo, you also pay this fee. The amount of the fee depends on the amount of the cryptocurrency transaction.
|$1 to $4.99||$0.49|
|$5 to $24.99||$0.99|
|$25 to $74.99||$1.99|
|$75 to $200||$2.49|
|$200.01 to $1,000||1.8% of the transaction|
|More than $1,000||1.5% of the transaction|
Venmo Card Fees
If you opt for a Venmo debit card, you won’t pay any fees for the card. You also won’t pay a fee when you use it to pay at the register or in online checkout processes, and you can make withdrawals from in-network ATMs with no Venmo fee.
However, withdrawals from out-of-network ATMs cost $2.50 each time you make them. If you make over-the-counter cash withdrawals at a bank, the fee is $3.00 for each transaction.
- $10 or 5% of the transaction value for cash advances
- Up to $41 for late fees
- Up to $30 for returned payment fees
You’ll also pay between 19.49% and 28.49% in interest for any balance you carry forward on the Venmo credit card, depending on your creditworthiness and the type of account you have. However, you can get between 1% and 3% cash back for eligible purchases.
Overall Costs Rundown
While Venmo does charge some fees, it’s fairly easy to avoid them. If you use your Venmo account to pay friends or businesses, you can avoid fees by only paying with your Venmo balance or connecting a bank account or debit card instead of a credit card.
Venmo and Your Financial Safety
Venmo can cause unexpected costs if you don’t pay attention to security. Any time you conduct financial transactions over the internet, you accept a certain amount of risk. But there are ways to protect yourself.
The primary risk of using Venmo is the possibility that someone will hack into your account and use it to steal money from you. It’s also possible for a scammer to get your Venmo information by posing as a legitimate source to get your login information.
Once a scammer or hacker has your account information, they can change your password so they have more time to steal from you before you can fix the problem. They can link your Venmo account to their bank and funnel money away from you before you realize it. They can also prevent you from getting notifications that might alert you to the situation faster.
Built-In Safety Features and Steps You Can Take
First, you should know the precautions Venmo takes to protect your money. Some of those features are built in, while others require you to opt in. Data encryption is the basic level of built-in protection. This makes it harder for anyone to steal your information while it’s in transit.
However, data encryption offers low-level protection that’s fairly easy to circumvent. To protect your money, consider following these Venmo safety tips:
- Add a PIN to your app. A PIN can stop, or at least slow, anyone who gains access to your phone from initiating a transaction.
- Don’t pile up “Venmo bucks.” When you’re paid, you can leave the money on the app or move it into your bank account. Don’t leave a lot of money on the app. Your money on Venmo isn’t insured by the FDIC or protected by many banking regulations.
- Deactivate transaction sharing from both sides. Don’t broadcast when you make payments. And disable sharing of “transactions involving you” in the privacy settings. Set your Venmo account to private rather than the default public setting.
- Pay a limited group of people using the app. Only pay people you trust using Venmo.
- Refrain from using Venmo to buy things from online classified sites.
Check Your Credit Report for Signs of Identity Theft
If you’ve overshared or you have reason to believe your personal or payment information was compromised, keep a close eye on your financial accounts. You may also want to monitor your credit report to look for any changes. A sudden drop in credit score that you can’t explain with your own activity may be a sign of fraud.
Check Out ExtraCredit
Want an easy way to access your credit reports and view 28 of your FICO scores? Consider signing up for ExtraCredit. You can also access cashback offers and make a little money to fund some of your Venmo spending.
Is Venmo Right for You?
Venmo is a popular payment app that doesn’t come with a lot of fees. Many people can use the app completely fee-free. Consider how often you’ll use it and if other people you trust use this app and will accept payments from you on it to know if it’s right for you.
Understanding Venmo’s fee structure can help you avoid unexpected charges and make paying people — and getting paid or reimbursed — faster and easier. Refer back to this guide to ensure you’re taking the right actions to prevent unnecessary Venmo fees and protect your financial safety.
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