Over the years, Venmo has evolved into one of the most successful and recognized p2p payment apps. However, some people might wonder how it relates to PayPal. So, this text breaks down all you need to know about Venmo and its relation to PayPal.
Is Venmo the same as PayPal? Venmo is not the same as PayPal. Like PayPal, Venmo is also a peer-to-peer money transfer app, but they are not the same. Venmo is owned by PayPal and only works in the U.S unlike PayPal which serves customers globally.
Venmo was created for people to split bills and is more suitable for everyday transactions/payments.
Venmo has enjoyed a lot of success in the recent years and has more than 52 million users in the U.S. Its unique social feature makes it stand out from the competition and appeals to the younger generation. Due its current popularity, more merchants and online stores are accepting it as a form of payment for transaction but mostly through the Venmo Card.
How Does Venmo Compare to PayPal?
Is Venmo the Same as PayPal? No, but it is owned by PayPal since the latter acquired it in 2013. So, since they both have the same owners, they are bound to have some similarities and differences.
When Venmo was created, the main idea behind it was to create an app that would make it easier for people to split bills for example at meals and at the movies. Since then, it has been developed to possess various features and capabilities that have contributed to its recent success.
When looking at the Similarities and differences we will compare different factors such as;
- Withdrawal speed
- Transfer limits
- Unique Features
Both Venmo and PayPal do not charge fees for receiving funds from family and friends. Users are also not charged for sending money using either their Venmo or PayPal balance. However, both charge for credit card transactions. When it comes to withdrawals, clients are only charged $2.50 for both with exception to those who use Moneylink machines for free withdrawals.
The only major difference in terms of fees are the card transactions. While Venmo debit card payments are free, PayPal charges about $0.30 for each transaction and an extra 2.9% fee for debit card transactions.
These two companies differ in terms of transfer limits. Venmo has a weekly limit of $299.99 which can be increased when you provide more verification information. On the other hand, verified PayPal users are not restricted in terms of weekly transactions but, you can only send up to $10,000 per transaction.
How long does it take to transfer money? For Venmo and PayPal, you are assured that your funds will be available in about 24 hours or basically the next day. But, there is an instant transfer option for both that is applicable to individuals with an eligible bank account or debit card. The catch is that you will have to pay a 1% fee for your funds to arrive within 30 minutes.
In terms of security, both Venmo and PayPal have strong protection features to protect clients. These include;
- Fraud monitoring
- Data encryption
- Buyer and seller protection.
But even with these security features, clients still need to beware of scams especially in the form of emails or phishing texts. Remember, Venmo or PayPal personnel will never contact you asking you for your personal information for verification.
Venmo is unique for its social feed feature which makes it stand out from other P2P payment apps. Within this feature users can scroll through transactions that friends or other people they know have made, who they made them to and the notes they shared. The public feed is a default but you can change it in the settings if you want to be more private with transactions. Users can change their privacy settings so that their transactions are only viewed by the recipient or only by their friends.
PayPal stands out because of its ability to be used by both merchants to accept payments and shoppers to make them either online or at physical retailers. Unlike Venmo, PayPal is used globally and accepts foreign currencies, thus giving small businesses opportunities to expand their client base internationally.
When to Use Venmo and When to Use PayPal
Venmo and PayPal each have their strengths over the other depending on what you use them for. There are situations where Venmo is the better choice and others where PayPal might be a better option. For one, if your intention is to make personal payments to people you already know, Venmo is the better choice.
Venmo is reliable for people looking for a simple app that you can use to send to friends and family frequently. These include simple transactions like,
- Splitting bills
- Paying the babysitter
- Paying for Uber rides
- Purchasing groceries
Its social feature which allows you to see exchanges and transactions makes them feel friendly. That’s not saying that PayPal isn’t good for paying friends; the decision often comes down to what your friends are also using.
For vendors and people who frequently purchase products online, PayPal is your ideal choice because it is accepted at most vendors globally. It was even originally created as the payment provider for Ebay but developed to serve more merchants globally.
In terms of flexibility, PayPal is ahead mostly because it has been around for decades. Clients have access to debit and credit cards that they can use for sending or receiving funds from individuals or businesses from almost any country. Furthermore, you don’t even need to know them personally, but be sure to Vet individuals before sending any funds.
The choice between the two relies on preference and the type of transactions you want to make. PayPal is more suited for transactions from business to consumer and vice versa while Venmo leans more towards peer to peer transactions.
You can even opt to use both depending on your needs for example, Venmo for day to day transactions and PayPal for the bulky Payments to people or businesses. Just remember to stay safe from any scams that involve either.