Things You Need to Know About Venmo
Venmo is an organization that majority of the Americans have heard of, even though they’ve never used it themselves. It is not like a bank account or a debit card but something that can handle your money transactions quite efficiently. But how does Venmo work and what even is it? From fees and transfer restrictions to safety concerns and more, below are the Things you need to know about Venmo app:
What is Venmo?
Venmo is an app that supports both Android and iOS and enables fast and simple transfers between private individuals. It’s mainly for friends, and it’s typically showcased as the means to split bills, re-iterate friends for cab rides, or even pay roommates the half of your rent. Just like PayPal, Venmo is tethered to a bank account or debit/credit card, however, there is an in-app balance too.
Venmo is unique due to its focus on social interactions. Every payment has a message connected that is published publicly with the dollar cost removed. This functions much like other different social media feeds such as Twitter or Facebook.
Who owns Venmo?
Venmo was bought by Braintree in 2012 that was purchased itself by PayPal in 2013. PayPal’s ownership of Venmo has resulted in a variety of new features being added to the platform, however, in some aspects they are competing in the same space.
How does Venmo work?
As Venmo is a mobile-only platform, to use it you need to install the app from the Google Play Store or Apple App Store. After that, you need to develop an account and, if you want to transfer money, connect a US bank account or credit/debit card. Venmo currently is not open to bank accounts outside of the United States. This is the most important Things you need to know about Venmo.
The service functions like a mediator and sends money from your Venmo account to another person’s account. It may require a few hours to a few days before the funds appear in the other user’s account. If there are enough funds in your account then the money will be reduced from there. If not then it will send the full amount from your chosen payment method.
Is Venmo free? How does it make money?
As long as you link a bank account or debit card with your Venmo account, it’s free to create one. There is a 3% fee on every transaction if you link a credit card which is from the credit card company itself. Venmo gives this fee onto its clients.
There are a few sources like instant transfers from which Venmo makes money. With this service you can transfer money from the app to a US debit card or bank account which can arrive in no more than 30 minutes. With a minimum fee of $.25 and a maximum fee of $10, this service prices 1% of the transfer value. You can also transfer money for free if you do not want to pay with a 1-3 business day wait time.
The company also derives money from vendors who pay a small percentage of every transaction that is made through the service. This is standard procedure, and you won’t pay any extra fees as a customer. The app is being accepted at over two million retailers in the United States.
Is there a limit on transfers?
There is a restriction to how much money you can transfer to other users with Venmo every week. The limit for new, unverified users, is $299.99 per week. Once you’ve verified your identity proof by delivering in some identification like the Social Security number, ZIP code, and birthday, the restriction spikes up to $4,999.99 per week. An additional $2,000 can be spent per week on authorized vendors, hence, the overall limit is $6,999.99.
For the motive of Venmo transfer limits, the week is starting at the time of the transaction. This implies that each transaction counts against your restriction for exactly one week, despite of when in the week it was made.
There are also Venmo restrictions on the amount of money you can send to a bank account. Those restrictions are $999.99 for unverified users and $19,999.99 for verified users every week and follows the same rules above. Although, the biggest amount you can transfer at one time is $2,999.99.
Is Venmo safe?
Venmo is secure to use for simple money transfers to family and friends or buying goods at a legalized vendor. The company keeps your data stored in secure locations by encrypting your data. Hence, the probability of a security breach is low. Still, you should take precautions just like all services related to finance
The Venmo app has some extra security measures to keep your account safe and secure; like a PIN requirement for every transfer. If you lose your phone or think that someone is utilizing it without your consent; you can also log out of your account locally on the official website.
Venmo itself has declared that the service is deemed for use between friends, hence, you should never send money to someone you don’t know. If there is a fraud you will not be able to get your money back if you transfer the funds to them on your own accord. This can be changed in the settings but the default setting is public to all. These are the Things you need to know about Venmo.