You might have had this experience. You’re talking to someone about a service they can perform for you. Maybe you’re about to get a haircut or a pedicure. The person who’s going to perform that service says you can pay with cash, a credit card, or you can Venmo them the money.
If you don’t know about Venmo yet, the concept might confuse you. In this article, we’ll talk about Venmo. We’ll cover what it does, how you use it, and some of the best times to do so.
What is Venmo?
About 70 million people use Venmo every month, which indicates this payment system’s popularity in 2022. Venmo is a mobile payment platform. It has existed since 2009 but has become considerably more popular in the past few years.
PayPal, which you might have heard of as well, owns Venmo. They’ve owned it since 2012. Venmo was originally aimed at individuals who wanted to split costs with friends or family members. If a group went out to eat and wanted to divide up the check when it came, they’d use Venmo.
Since that original concept, it has spread to other uses. Now, some people use Venmo much like PayPal, the parent company.
How Does It Work?
If you want to use Venmo, you need to download the app to your phone. You can use it on a desktop, tablet, or laptop, provided you have a Wi-Fi connection. You can utilize it on your smartphone using your data if you don’t have Wi-Fi available.
You can ask for money or send it. It starts when you tap the “pay or request” button. You can either type in the information and send money to someone at that point, or you might send them a payment request for the proper amount. If a merchant sends you a request, you can pay them that amount as soon as it’s convenient.
You put the person’s name who you’re going to pay into the appropriate box, along with their email and phone number. If you’re trying to pay someone who’s close by, you can also scan the app’s QR code. That’s probably best if the merchant is right there when you’re trying to pay them.
How Does Venmo Make a Profit?
You might also wonder at this point how Venmo makes money. They do it in several different ways. If you instantly transfer funds from your Venmo account into a bank account, Venmo takes 1.5% of that transaction. The larger each transaction, the more money they get.
They also make money by charging for crypto transactions. They make money when they cash checks, and they make it through instant transfers as well.
When is the Best Time to Use Venmo?
Paying a friend for a restaurant bill is still one of the more popular times to use Venmo. You might use it if one person pays for a bunch of movie tickets with a credit card, and you want to pay them back. You can use it if your roommate sent your landlord a check for the total month’s rent, and you want to give them back your portion of that.
Small businesses also seem to like using Venmo. We mentioned possibilities like hairdressers, barbers, or beauty salons. They might accept Venmo payments, and you can also pay with Venmo at some restaurants, bars, tattoo parlors, and many more.
When Should You Avoid Paying with Venmo?
Venmo needs to explicitly approve any transaction that you make with it. That means you can’t just pay with the app unless you’re dealing with a person or entity that already has an account set up through Venmo. Usually, that approval process takes a couple of days.
You may want to avoid paying with Venmo if you’d like to avoid the fees we mentioned. If you pay for something using a credit card, you won’t have to pay any of those fees. Of course, credit cards often have their own fee structure, so watch out for that.
If a merchant or friend needs money instantly, you should avoid paying them with Venmo as well. The money you send takes a day or two to clear unless you pay an additional fee.
It seems clear that Venmo works well for some situations, but it has its drawbacks as well. You can always pay for transactions in cash, through that means you have to carry money around with you, which some people like to avoid.