Business

Venmo: What Is It, How it Works, and Is It Safe?

Venmo mobile payment app

The old days of no cash, no transaction is no longer the case today. Thanks to mobile payment apps, including Venmo. Just like other typical payment apps, Venmo has been rescuing people from embarrassing situations such as being stranded or making urgent payments when cashless.

If you want to install and use the Venmo payment app to make transactions more accessible for you at any time and anywhere, it’s a good ideal. But you must know everything about this app before making up your mind on it. What is Venmo all about, how does it work, and does it have any danger? These questions and other probing questions you have about Venmo will be answered in the article.

Relax and read through this article with all interest, to decide if Venmo is the perfect payment app you should use.

What is Venmo?

Venmo is one of the existing digital wallets which allows you to share and make payments with your friends. Also, it permits you to request and pay money to your friends. Its primary aim is to offer a social method of paying them your debts whenever you are cashless. For instance, in a situation whereby you visit a store with your friends, and you all need to share the bill. You don’t need to use your transportation fare, just log in to your Venmo app. Pay your share of the money without any stress or delay.

In other words, it’s a peer-to-peer payment app that’s accessible on Android phones and iPhones. Venmo permits an effortless and fast direct exchange of money between you and others.

Who owns Venmo?

Venmo is a virtual payment service that is owned by PayPal. It came into existence in 2009, back then it was used as a payment delivery package in the form of a text message. The real authors of Venmo are Andrew Kortina and Iqram Magdon-Ismail. It’s available on mobile devices and the web.

Venmo app
Screenshot from Youtube

Is Venmo Safe?

Venmo app makes use of bank-level data encryption and security to protect and guard your transactions against illegal transactions. However, Venmo will not approve your payment to an unknown person and will not help you get back any money sent to the wrong person by mistake. To avoid this, be careful when making any transaction and double-check the account details before sending any amount of money. For extra security, Venmo offers another option for you to create a touch ID and pin to log in to the app always.

Even though Venmo has done the right thing by giving users the option to create a pin for security, some don’t use it. As a result, they leave their app open, which makes it easier for other people to access their records and make illegal transactions. If you don’t want something like that to happen, keep all your transaction information private by using the pin to access the app.

Furthermore, Venmo is majorly created for transactions between family and friends. Venmo warns users to avoid sending money to people they don’t trust or know. Such an act is regarded as a very risky transaction that can lead to being scammed. This is because you may not get what you have paid for, and at the same time, lose your money.

In a nutshell, Venmo is not entirely safe, but it is safe if your transactions are made to the people you know very well and trust. Also, be careful of scams. Some people may use a stolen credit card to send you money or someone you sent money to may deny it. Lastly, secure your phone with a pin and don’t let anyone you don’t trust, know it so that you won’t be robbed.

How Does Venmo Work?

Venmo works perfectly because it will enable you to link your bank account, and if you don’t mind, your credit or debit card too. When you make transactions via your debit card and your Bank or with Venmo balance, you will not be charged any fee. Well, only a 3% charge is included when you use your credit card to transact.

You don’t have to add money to your Venmo account, except when a friend sends you money. This is when you have to take permission to cash out the dough. Then your Venmo account will be credited on the following business day.

Simply link Venmo with your contacts and your selected businesses. Encryption is used to protect all the data transactions you make on the Venmo app.

Asides, Venmo features a fun tool that enables you to describe your transaction anyway you like. You can be dramatic with this feature. This is so because the transactions are expected to be made to close friends and family members. Likewise, you may feel entertained and curious when you scroll through your transaction history on the app, depending on how creative you are with description.

This feature is relative somehow to social media feed since you can comment and like on transactions of your friends. You may simply use emoji to describe your transaction aim, which can be fictional or non-fictional.

Asides, Venmo features a straightforward and fast interface that makes the transaction smooth and quick to make. This is the lifesaver you should have on your phone in case of an emergency to get the help you need in no time. Venmo has another impressive feature that allows you to keep easy track of all your payments in a similar way to a mobile banking application.

You must also know that to use Venmo, you must be based in the US, so it doesn’t work internationally, which is one of its cons.

Venmo features
Screenshot from Youtube

How Does Venmo Make Money?

When you start using Venmo, you may want to admit that it is free. But the truth is that Venmo has two ways of making money, which we will discuss now.

Here are the two available Venmo fees which it uses to make money

  1. Through Credit Card
    Venmo will not charge you if you make transactions by Venmo balance or with your bank account and debit card. Well, if you send money with your credit card, your Venmo fee will be 3% on the total transaction you make.
  2. Merchant Fees
    Because PayPal owns Venmo, it has the opportunity to make money via these merchant Venmo fees and the credit card transaction.Any merchant that gets credit via PayPal has accepted Venmo as their payment option too. These merchants also pay the standard percentage of 2.9% with the fixed charges that would have been paid to PayPal.This combination has led to advantages for you and your businesses. This is because you will be using your best choice of mobile wallet, and your business will be offered entrance into the social media feature without a fee. This, as well, will attract more clients and customers to your business.

How to Add and Cash-out Money From Venmo

First, let discuss how you can add money on your Venmo account. If you have a Venmo card it will be easier for you to add money on your Venmo account through these methods:

  • Add money directly via a mobile app if you have a Venmo card.
  • Add money on your Venmo account from the Bank you linked it with. You can achieve this manually with a Venmo card.
  • If you don’t have a Venmo card, you can still add money, but it must be via the Venmo website on your computer.

Here is a step-by-step guide on how to add money on your Venmo account, through your Venmo card with the mobile app.

  1. Log into the Venmo app.
  2. Choose the “menu” at the top left corner.
  3. Click the “Manage Balance” option, which is next to your balance amount above the menu.
  4. Click “Add Money.”
  5. Type the amount you desire to add to your Venmo account, and then click “Done.”
  6. Confirm the bank account you’ll be adding the money from, and then click “Next.”
  7. Crosscheck the transfer information revealed to you, and finally, click “Add Money.”

You should note that you cannot cancel the transaction made once you confirm and click add money, and it is completed. The completion should take 3-5 business days.

Now, let’s show you how you can add money on Venmo website on your PC if you don’t have a Venmo card:

  1. Open a reliable web browser.
  2. Visit venmo.com.
  3. Log in with your Venmo details.
  4. Venmo will send you a code on your mobile number to be sure that it’s you. Enter that code in the provided space. This will lead you to your homepage.
  5. Type in vemo.com/add funds into your search bar, then click enter. This will open a box labeled “Add funds from your bank account.”
  6. Inside that box, enter the amount you want to transfer, and then, if applicable, choose the bank account you wish to add the money from.
    You should note that to add money successfully, you must first verify the bank account you want to use with Venmo.
  7. After you have entered the amount, you want to transfer and choose the account you want to add money from.
  8. Press “Transfer money into Venmo.” Next, you will be requested to confirm the transaction. After that, press “Confirm & Add Funds.”

You should be able to get your money added into your Venmo account after 3-5 business days.

Likewise, there is a Venmo limit that determines your transaction. That is about the amount you can receive and send with each of the account types.

In the following section, you will see how to cash.

Cash-out Money from Venmo
Screenshots from Youtube

How to Cash From Your Venmo Account

You can cash from Venmo with your credit card or your bank account. Before you can successfully cash with your bank account, you will definitely need to link your bank account to Venmo. Here is a step-by-step guide to follow.

To link a bank account to your Venmo account:

  • Click the Link Bank Account button.
  • Select the Bank from the list.
  • Press your login credentials.

If your bank is not on the first list, select others from the bottom. If you select this option, you will need to add your account number and routing number.

The next step is to confirm the bank account.

Some banks are enabled to make instant process verification. If your bank is among them, simply input your bank details to confirm your account.

For instant confirmation with Venmo app:

If your bank does not confirm instantly, you can confirm by verifying micro-transfers.

Just input your account details, and then visit Venmo’s Bank Verification page to input the amounts you want to transfer. After that, you will be allowed to transfer money into the Bank you selected from your Venmo account.

If you have confirmed your identity, you can send up to $19,999 a week from Venmo.

Transfers to the bank account usually take a full business day to be successful. Likewise, they normally show in your bank account as a deposit from something like this “VENMO-0 CASHOUT.”

When you buy something, Venmo will use your Venmo balance at default, except otherwise specified. If the amount doesn’t cover all your purchases, Venmo will cash-out the entire amount from the linked bank account.

To transfer money from Venmo account:

  • Tap the icon at the top left corner. It will show like this (☰).
  • Select transfer to the Bank from the menu options.
  • Select the amount you would like to transfer.
  • Click the transfer button.
  • When completed, choose the “Confirm Transfer to Bank” icon.
  • Search for an amount that can enter your bank account on a whole business day.

How to Pay Someone on Venmo

Venmo supports you to send money online to your friends or family members via some the following;

So, here is how to pay someone through Venmo app;

First, you must have some money in your Venmo account or use the link to your bank account or use your credit card.

When a Venmo user sends you money into your Venmo account, the funds will remain there until you cash out to a different source. The cash in your Venmo account is referred to as your Venmo balance, and you can use it to pay a recognized merchant or make a payment to someone.

Payment to another source
Screenshots from Youtube

To make payment to another source, you will need to add the source to your Venmo account.

Therefore, do the following:

  • Login to your Venmo app
  • Select the hamburger button at the top left-hand of the application
  • Click settings.
  • Click the payment methods option under preferences.
  • Choose to add a Bank or card under the payment methods.

About the Payment options:

Venmo offers you different options for payments to friends and for purchase. You will be allowed to set up your preferred payment options when you purchase or pay for the first time.

You can select an automatic payment source from the app, by:

  • Click the Venmo app on your smartphone.
  • Select the hamburger icon at the top left-hand of the app.
  • Click on settings.
  • Choose backup payments or click cards or add banks.

To pay through Venmo:

  • Click on the Venmo app on your smartphone.
  • Select the payment option at the top right-hand.
  • Choose the person you want to pay from your list of Venmo contacts or add a recipient. You can add recipients by their Venmo phone number, username, or email. You can as well scan a Venmo user’s QR code.
  • You can also add the payment amount.
Friend request or send payment
Screenshot from Youtube

Note that you are free to add a note to the payment, which can just be an emoji, Holler stickers, Snapchat, and Bitmoji.

  • Click on pay, and you will see your default backup account or Venmo balance.
  • Select the presently selected account to make a change.
  • Confirm the payment.

Then, Venmo will make the payment to the selected person.

To make payments to merchants:

You must opt-in to make the purchases, and from there, you can make the purchase.

To opt-in:

  • Click on the Venmo app on your smartphone.
  • Select the hamburger icon at the top left-hand of the app.
  • Click settings.
  • Select connect browsers.
  • Confirm your NATIVE smartphone. If you use iOS, it is Safari; if you use Android devices, it is Google Chrome.

To make the merchant purchase via smartphone, you will see a Venmo or PayPal button.

If it’s a PayPal button you see, click the button when you want to make merchant payment. But if it’s Venmo you see, click on the Venmo payment option on the next page, and the payment will be made.

For merchant payment via the website:

Compatible apps include a Venmo button that you can click while making the payment purchase.

You can search for the existing listing of companies that Venmo support for payment via the Venmo website.

Venmo for Business

Is Venmo Suitable for Business?

There is another advantage of Venmo that you may not know because it focuses on sending and receiving money from friends. The good news is that; you can also use Venmo for your business transactions. If you accept payment through PayPal, you can receive payment on Venmo too without an extra fee.

Although Venmo is not suitable for every kind of business, yours might be exempted. Venmo allows customers to link up their card and Bank with the app in order to send money for business purposes or pay friends. Immediately the payment is made, Venmo will notify the sender, which will appear on all feeds and the sender’s feed. But the notification will not show if the person has deactivated it in the settings.

The advantage of the showcase of business transactions is that it will show the purpose of the transaction; everyone (yours and the customers’ contact list) will be able to view it. Of course, this is one of the workable strategies to advertise one’s business. In return, it attracts more customers to the business. Only people who have made their feeds private will not see such business feeds.

Well, Venmo is only advisable for small business owners to avoid the chance of getting duped, which has been explained earlier. Therefore, if you own a small business, you should use the Venmo payment app.

Here are the reasons why you should use Venmo for your small business;

  • Better advertisement strategy
  • No huge charges, except the reasonable 2.9% and 30 cents Venmo fees on each business transaction.
  • Very fast to process payment
  • Fantastic features that make you connect with your customers in a friendly way and keep them for a long time.
  • Venmo is very safe to use for your business; as said earlier, it has some security measures to protect all your transaction data.

How to Use Venmo

how to use Venmo
Screenshots from Youtube

Once you have taken all the necessary steps explained earlier, ranging from adding another source to making payment, you are good to go.

What you haven’t learned how to do so far is how to set the viewers of your transaction feed and set up the Venmo app for use.

First, you can determine who see your transaction feeds by doing the following;

Above the pay icon, there is an icon that indicates “who should see the reason for this transaction in Venmo app’s feed. You will be offered three options; private, friends, or public. If you select private, nobody will see the transaction purpose or amount except you. But if you choose friends, only your selected friends will see them.

If you choose public, that means your contact list and their contact list will see your transaction purpose and the amount. The feature is excellent because you can always follow this fast and straightforward process for all your transactions. This means you can hide some feeds and make some public or show some to your friends alone.

How to set up Venmo

Here is the second thing you haven’t learned how to do and it’s the first step, to begin with Venmo.

Do these:

  1. Download and install Venmo app on your compatible device (iPhone and Android)
  2. You will be asked to signup with Facebook or email
  3. If you choose Facebook, you will sign up instantly and proceed. If it’s an email, you will need to enter your password, email address, and last name.
  4. You will then see information about Venmo, take your time to read down, and click on “next.”
  5. Read and accept the user agreement and Venmo privacy policy and click “next” at the upper right corner of the interface
  6. You will be asked to input your contact to receive confirmation code from Venmo.
  7. Once the code is received by text message, input it in the space provided and click “submit code.”

You can decide to add your picture and change your username anytime you like.

Sign up Vemo
Screenshots from Youtube

To sync contacts on Venmo

  • If you can up with Facebook, you will be asked to do that via Facebook.
  • If you use email, will be asked to link your account, choose “ok” or “not now”
  • Click next to choose phone contact. If you are not ready, click “skip” at the top right corner.
  • Scroll through Venmo privacy information by swiping to the left side until you see the “you are in control.”
  • Click “done” at the top right corner

Making a payment to friends, family members, and business transactions has been made easier, quicker, safer, and enjoyable. Venmo mobile payment app is what you should use to avoid getting out of cash at any point in time.