What’s Venmo and how does it work?

Venmo is a US mobile payment and digital wallet service. Venmo’s customers can pay for goods and services, transfer funds to others and buy bitcoin using a mobile phone app. It’s a popular way to split bills, pay for rent, or just send someone a quick payment.

How Venmo Works

To use Venmo, you need to create an account via the Venmo website or Venmo app, iOS and Android, and provide personal details, phone number and email address. You then need to verify your bank account information. You have to be physically located in the US to create your account.

Once your account is set up, you can use the money in your Venmo account for your transactions. To add money into your account, you have to link your bank account, debit card or credit card to your Venmo account. If you do not have enough money in the account when making a transaction, Venmo will automatically withdraw the money from the linked bank account or card. Venmo has no overdraft/credit feature.

Does Venmo Work Internationally?

Venmo is currently not available for international use. This means you cannot use Venmo to send or receive money if you are located outside of the United States, or if the recipient of your payment is located outside of the United States.

There are a few reasons for this limitation. Venmo is only licensed to operate in the United States, meaning that they are not legally able to process transactions that involve other countries. It only supports US dollars, so it would not be able to correctly calculate exchange rates or fees for international transactions. The service is only compatible with U.S. based bank accounts and phone numbers. You must also be able to send and receive SMS/text messages from short codes. Getting the Venmo card, you will need to have a Social Security Number.

If you need to send or receive money internationally, there are a few other services that you can use, such as Wise.

Pros and Cons of Venmo

Venmo app simplifies splitting bills and sending money between friends and family. Its ease of use, with a simple interface and quick transfers, coupled with fun social features such as emoji and GIF attachments, makes it a popular choice. But like any financial tool, Venmo comes with its own set of pros and cons to consider.

On the plus side, Venmo offers convenience and affordability. Standard personal transactions within the US are free, making it a cost-effective way to settle debts and expenses. Additionally, its widespread adoption means most people you interact with likely have a Venmo account, making it a readily accessible payment option.

However, Venmo isn’t without its downsides. Instant transfers and business payments come with a 2.9% fee (minimum $2), which can add up for frequent users. Privacy concerns arise from public feeds and potentially visible transaction details. Furthermore, the ease of use can lead to impulsive spending, making it important to be mindful of your financial habits. Finally, Venmo is currently limited to US users and transactions, limiting its global reach.

Venmo Features

Venmo offers a number of features that offer convenient and affordable financial transactions. Key features include the following:

Venmo Payments

You can pay friends and family with Venmo using the money you have in your Venmo account or link your bank account or debit card. You only need the recipient’s phone number, Venmo username or email. If the recipient doesn’t have a Venmo account, they need to create one. You can also sync your phone and Facebook contact in the app. Paying with a bank account or debit card is free, but payments with a credit card have a 3% fee for each transaction.

Unfortunately, Venmo doesn’t currently offer a built-in feature for recurring payments. This means you can’t directly set up automatic transfers or schedule payments to happen regularly. Moreover, Venmo payments are generally not reversible once they’ve been sent and received. If you sent the wrong amount or meant for someone else, you’ll need to work it out directly with the recipient for them to return the funds.

Venmo Purchases

You can use the Venmo app to make purchases on websites and retailers that accept Venmo. Over 2 million companies in the US accept Venmo as a payment option. Venmo approved merchants include Uber rides and Uber Eats, Jane, Urban Outfitters, Poshmark, Game Time, GrubHub, and Foot Locker. You can make purchases using the app or Venmo debit card.

Venmo Direct Check Deposit

Venmo Direct Deposit feature offers an alternative to traditional check cashing for paychecks, government benefits, and even personal checks. By providing your account information through the Venmo app, users eliminate the need to visit a bank or ATM. Deposits typically arrive within one to three business days.

Venmo Crypto

Venmo allows users in the US (except Hawaii) to buy, hold and sell cryptocurrencies on the Venmo crypto app. Venmo’s users can buy bitcoin, Ethereum, Litecoin and bitcoin cash for as little as $1.

The company has expanded its crypto services by allowing credit cardholders to convert their cash back rewards into cryptocurrency. Venmo offers credit cardholders between 1% and 3% cash back on select purchases. Customers can activate the Venmo crypto reward feature by selecting the rewards tab of the credit card home screen. For more information, you can also refer to our article PayPal Cryptocurrency Service in the US and UK.

At this time, you cannot use crypto as a way to pay or send money on Venmo. You cannot use crypto as a way to make purchases with Venmo. Venmo Purchase Protection does not cover cryptocurrency purchases. However, cryptocurrency purchases are protected in the event unauthorized activity takes place.

Venmo Virtual Card

Does Venmo have a virtual card? The answer is yes. You can create a Venmo virtual card online within the Venmo Credit Card section of your Venmo app. You can only replace your virtual Venmo credit card or Venmo debit card number once every 24 hours.

How to Get Venmo Virtual Card

To get a Venmo virtual card, open the Venmo app, tap on Profile, then Virtual Card, and then Get a Virtual Card. Enter your billing information and create a PIN, then tap on Get Card. Once you have created your virtual card, you can use it to make payments online or in stores. To use your virtual card online, simply enter the card number, expiration date, and CVV code when you are making a purchase. To use your virtual card in stores, you can either use the Venmo app to pay or you can use the physical card that Venmo will send you in the mail.

Venmo Rewards

Venmo Rewards is a program that offers automatic cash back when you pay with the Venmo card at merchants that accept Venmo. Venmo’s cardholders automatically earn cash back on qualifying purchases. Rewards are deposited directly into your Venmo account. Opt-in is not required for this service. The Venmo rewards merchant list and current merchant offers are shown in the Offers section of the Venmo app.

Venmo Rewards Merchants List

Venmo rewards merchants offer cashback or other perks to Venmo users who shop at their stores. Venmo partners with different merchants throughout the year, so the list of merchants can change. However, some popular Venmo rewards merchants include:

  • Retail: Adidas, Amazon, Best Buy, CVS, Dunkin’, Foot Locker, Forever 21, H&M, Home Depot, Kohl’s, Lowe’s, Macy’s, Nike, Nordstrom, Sephora, Target, TJ Maxx, Ulta Beauty, Walmart
  • Food and drink: Chipotle, Domino’s, Grubhub, McDonald’s, Papa John’s, Starbucks, Subway, Taco Bell, Wendy’s
  • Travel: Expedia, Hotels.com, Priceline, Rentalcars.com
  • Other: Uber, Lyft, Spotify, Venmo Mastercard Debit Card

Venmo News Feed

Venmo’s news feed is a social networking interaction in the app. When a customer makes a transaction, the transaction details (without the payment amount) are shared on your “news feed” and to your network of friends. You can interact with each other via comments, emojis, and likes. You can choose if you want to have your profile appear on other users’ friends lists, or if you would prefer to stay hidden. The social elements is limited to your actual friends.

Venmo Payouts

Businesses can directly pay you through Venmo Payouts. This service allows businesses to connect with Venmo customers through an API integration to pay out money. Instead of writing checks, businesses can use Venmo to transfer money through Venmo Payouts for things like rebates, rewards, etc.

Retailers That Accept Venmo

Retailers can accept Venmo payments through PayPal’s online checkout process, where you can select the Venmo payment option on websites that accept Venmo after tapping the PayPal button. Retailers need to first be PayPal merchants to use this service. It is now accepted by over two million merchants in the US, making it a convenient way to pay for your daily purchases. We have listed some of the most popular stores that accept Venmo.

Is Venmo Free?

One of the attracting features of Venmo is that setting up a Venmo account is free and there are no monthly charges. However, there are fees associated with particular services. See the full Venmo pricing below.

Venmo ServiceVenmo Fee
Account set upFree
Monthly chargesFree
ATM balance inquiry (in-network or out-of-network)Free
ATM withdrawalFree in-network/$2.50 out-of-network
Customer service (automated or live agent)Free
Cash reloadN/A
Electronic withdrawal (standard or Instant)Free or 1%* (min. $0.25, maximum $10 fee for instant transfer)
Over-the-counter cash withdrawal (bank and other financial institution)$3.00
Receiving/withdrawing money into your Venmo account or using standard transfer to your bank account.Free
Sending money from a linked bank account, debit card or your Venmo balanceFree
Sending money to people (using your credit card)3%

* This fee can be lowered depending on how this account is used.

Venmo Crypto Fees

Cryptocurrency buy or sale amount:Venmo cryptocurrency fees
$1.00 – $24.99$0.50 (minimum fee)
$25.00 – $100.002.3%
$100.01 – $200.002.0%
$200.01 – $1000.001.8%

Venmo vs PayPal

Venmo is owned by PayPal. Venmo and PayPal are both mobile wallets. However, Venmo is mostly used for personal accounts with most services being free, while PayPal is ideal for individuals, small and big businesses and charges a fee for transactions and transfers. You can send money to PayPal from Venmo, but you need a PayPal Cash or PayPal Cash Plus to do this.

Is Venmo Safe?

Venmo uses encryption technology to protect account information and monitor account activity for any suspicious transactions. Eligible purchases are covered by an authorized merchant payment protection plan. Account information is stored in various servers in secure locations. If you have lost your phone or suspect unauthorized activity, you can prevent your phone from accessing your Venmo account.

While Venmo accounts aren’t FDIC-insured like traditional bank accounts, funds used with specific features can benefit from deposit insurance. When you utilize Venmo’s debit card, direct deposit, or check-cashing options, your money is held in accounts of partner banks that are FDIC-insured up to $250,000 per depositor. Its cryptocurrency service is licensed by the New York State Department of Financial Services.

Venmo Alternatives

There are a number of Venmo alternatives available, including:

Final Thoughts on Venmo Account

Venmo is a popular mobile payment app that allows you to send and receive money instantly in the US without incurring exorbitant fees. It is a fast, easy, and convenient way to pay for goods and services, and it offers a number of features that make it a great choice for both personal and business use. The major drawback for this platform is that you need to be in the US to create your account and must have a US bank account.

More Information

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We want to inform you about the latest banking trends and developments, by providing comprehensive reviews of banks around the world offering virtual banking services and bitcoin based banking.

Our aim is to help you know the best bank accounts, how to open a bank account, best banks to invest and buy bitcoin, how to apply for payment and virtual cards, how to open a non-resident bank account in the US or EU, how to earn a passive income with your crypto, obtain a loan with your crypto deposits, and many other banking-related topics.