Venmo Review

Venmo is a peer-to-peer (P2P) payment app that is meant primarily for sending and receiving money from family members and friends. Since its founding in 2009, the app has grown to more than 60 million users. If you’re thinking about using Venmo to send and receive cash, here’s what you need to know.

How to set up a Venmo account

Venmo eligibility requirements

Before downloading the Venmo app, make sure you meet the program’s eligibility criteria, including:

• You must be physically located in the U.S. (Venmo does not allow for international transactions).
• You must have a U.S-based cellphone that is capable of receiving text messages with short codes.
• Your phone number cannot be on file with another Venmo account.
• You must be at least 18 (or the age of majority in your state of residence).

Setting up a personal Venmo account: Step-by-step instructions

1. Download the most recent version of the app from the Apple App Store (iOS) or Google Play Store (Android).
2. Open the app on your smartphone.
3. Indicate that you intend to use the app for personal transactions.
4. Enter your phone number.
5. Verify your phone number by receiving a PIN code via text message. 
6. Create your account by adding a photo of yourself (optional), along with your legal first and last name, an email address, a username, and an account password.
7. Read and agree to the terms and conditions.
8. Input your debit card information. You’ll be able to choose whether to handle payments with your debit card or your bank account.
9. Verify your bank account, either by agreeing to use Plaid for instant verification or by agreeing to receive two micro transfers over the course of a few days. 

How to use Venmo

Now that you know how to sign up, here’s a closer look at how to use Venmo’s key features.

Paying friends with Venmo

Venmo’s main use is sending money to friends and family members at the touch of a button (although there is a Venmo for Business option as well). As a result, the first step toward sending or receiving funds is building a contact list. The app will prompt you to allow it to access either your phone’s contact list or your Facebook friends list to help connect you with other Venmo users you know.

Once you have your network set up, select a contact from your list and tap the Pay or Request button. You can also search for a user or find one using their unique QR code. You’ll then be prompted to choose between paying someone or requesting cash.

Finally, you’ll enter the amount of money you wish to send or receive, along with a brief description of the transaction, and hit the submit button. The other Venmo user should receive a notification of the transaction within a few minutes.

Using Venmo's social feed

The requirement to add a description of your transaction is unique to Venmo among the P2P payment apps. That’s because Venmo transactions are made public by default on the app’s social feed. This feature makes it possible for users to see when friends from their contacts list use the app, whether it’s to pay their dog walker or split a brunch tab among a big group.  

However, privacy-minded users will be glad to know they can set limits on who can view their activity. Public transactions are visible to anyone with a Venmo profile, while friends-only transactions will be shown to those on your contacts list. Private transactions can be seen only by you and the other involved party.

Making purchases with Venmo

Most of the time, making purchases through Venmo will happen by scanning the merchant’s QR code with your app. By scanning the code, the app will connect you to the merchant’s profile and prompt you to complete the necessary information for the transaction, similar to paying a friend.

As long as you enable mobile web purchases in the app’s settings, you can also use Venmo to make purchases on any store website that includes a PayPal checkout button. 

Spending with Venmo debit and credit cards

In addition to its P2P payment services, Venmo offers a branded debit card and a credit card. 

Powered by Mastercard, the debit card features cash-back rewards on eligible purchases. These  funds will show on your Venmo balance instantly, and they will be available once the merchant completes the charge. You have several options for using the funds in your Venmo balance, such as withdrawing cash at any fee-free MoneyPass ATM.

Offered by Visa, the Venmo credit card also comes with cash-back rewards. Venmo will track your spending in common categories, such as dining, travel and utilities. Then, you’ll earn cash back on eligible purchases. The card can be used anywhere Visa is accepted.

Venmo for Business

Venmo business profiles are different from the standard personal ones, and they offer a few unique features. For one, this type of profile allows you to accept payments via credit card and contactless payment portals, such as Apple Pay or Google Pay. You can also allow customers to check out using Venmo on your website. 

Venmo costs and fees

While the Venmo app itself is free to use, you should be aware of two common fees if you intend to send and receive money regularly:

1. Credit card payments: If you decide to pay for a Venmo transaction using a credit card, Venmo will pass the standard 3% credit card processing fee onto you.
2. Instant transfers: Venmo allows you to transfer funds to your bank account instantly instead of waiting one to three business days for a standard bank transfer. However, you’ll pay a 1.75% fee for the early delivery.

Pros and cons of using Venmo

Alternatives to Venmo

If Venmo isn’t right for you, here are some alternative P2P payment platforms to consider instead:

• Cash App: Cash App is similar to Venmo in terms of its fee structure and transfer speed. However, its transfer limits are slightly lower than Venmo’s limits for unverified accounts ($1,000 per month with Cash App versus about $1,200 per month for Venmo). On the other hand, Cash App allows for international transactions and ATM withdrawals.
• Zelle: Both Venmo and Zelle permit customers to make funds transfers within the U.S. The main difference is that Zelle is likely incorporated into your bank’s mobile app, allowing you to transfer money to your bank account within minutes rather than days. Also, the money you transfer with Zelle is federally insured as long as your financial institution is backed by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA). Zelle, however, doesn’t come with many of the bells and whistles of Venmo, such as a social feed.
• PayPal: Venmo is owned by PayPal. While Venmo works primarily as an app, PayPal has desktop functionality. PayPal also supports international payments.