Bankrate’s guide to using Venmo

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Venmo is a mobile app that makes peer-to-peer money transfers simple and inexpensive (or free). The app is mobile-only, meaning you can’t send or receive money on a desktop computer. You can, however, transfer money using the app via iMessage and special emojis.

The goal of Venmo is to help consumers navigate split checks and other situations where dollars need to change hands. Common uses for Venmo include sharing the cost of a cab ride with a friend, paying a colleague back for happy-hour drinks or even sending your roommate your half of the rent. If you go out to dinner with friends, one friend can pay the bill while the others Venmo their share to that person.

With Venmo, no one has to carry cash around, nor does anyone have an excuse to avoid paying their share!

How Venmo works

Venmo only lets you send or receive money if you have an account set up ahead of time. You need to download the Android or iOS app to get started, although you can also set up Venmo with iMessage or Siri voice command. It’s worth noting that payments funded through Venmo by a credit card incur a 3% fee.

How does Venmo work exactly? Here are the main ways you can use it.

Make purchases online. Since Venmo is owned and operated by PayPal, it shouldn’t surprise you that some online merchants accept Venmo as payment. Venmo claims you can try to pay with the service any time you see a PayPal button, and that you may also see a Venmo button on various merchant’s payment pages. When you make purchases online using Venmo, there are no fees — even if you use a credit card.

You can fund your account with plastic or checking. You can fund money transfers with a credit card, a debit card, a prepaid debit card or a checking account, but not a savings account.

You need a bank account to make cash withdrawals. If you plan to receive funds via Venmo and you aim to cash them out, you need to link your Venmo account to a bank account.

How much does it cost to use Venmo?

We already mentioned how, if you use Venmo for online purchases, you will not be assessed a fee — even if you use credit. You can also send money for free to friends provided your transfer is funded by a balance in your Venmo account or a debit or prepaid card.

Instances where you’ll pay to use Venmo include:

  • Standard transfer service — You’ll pay a standard fee of 1% (minimum of $.25 to maximum of $10) to transfer money instantly from the app to your bank account. You can also transfer cash to your bank account for free, although you won’t receive your funds for up to three days.
  • Credit card transfers — If you transfer money from a credit card, you’ll pay a flat 3% fee.

How to get started with Venmo

If you’re eager to find a way to transfer money to friends, start by downloading the Venmo app and entering personal information: phone number, email address, and bank account number. You’ll also need to create a Venmo log-in and password to secure your account.

Note that, when you first open your account, you’ll have a rolling limit of $299.99 per week for payments and purchases. Once you verify your account, Venmo limits increase to:

  • $4,999.99 rolling weekly limit for person-to-person payments
  • $6,999.99 in weekly authorized merchant payments
  • $6,999.99 in weekly Venmo debit card purchases

Also note that some per transaction limits apply. These include a $4,999.999 limit per transaction on person-to-person payments, a $1,999.99 transaction limit on merchant payments and a $2,999.99 limit on Venmo debit card transactions.

Venmo Mastercard®

As we mentioned above, Venmo offers a Mastercard debit card that lets you use your Venmo balance anywhere Mastercard is accepted. Venmo limits for the Venmo Mastercard® are:

  • $2,999.99 per purchase
  • $400 daily limit for ATM withdrawals, over the counter withdrawals and cash back with purchase transactions

Also note that there may be fees involved in getting cash out of an ATM, including a $2.50 domestic ATM withdrawal fee. If you want to get cash out with your debit card for free, you can use the MoneyPass ATM network without having to pay this additional charge.

Is it safe to use Venmo?

Venmo uses encryption to keep your funds and account details safe. They also use multi-factor authentication to confirm your identity and add another layer of security. In fact, you can set up a unique PIN code in the app, which can help ensure you’re the only one who uses your Venmo account to send or receive money.

The Venmo app offers additional security features you can access as well, including fingerprint-based log-in options.

How long does it take to receive money from Venmo?

One of the main benefits of using Venmo is the speed at which you can send and receive money. For starters, you can transfer money from your Venmo account to your bank account instantly if you’re willing to pay a 1% fee to do so (with a $.25 minimum and a $10 maximum).

If you have a Venmo balance already, any money you receive from another person can usually be accessed in a short amount of time — a few hours to a few days. However, it may take several days to receive money if a recipient has just opened a Venmo account for the first time.

Which is better — Venmo or Paypal?

Both Venmo and Paypal work well when you want to send money with a mobile device, and it shouldn’t be surprising that they work similarly since Paypal owns Venmo to begin with. You can use either platform to send or receive money with ease, but many people like using Venmo due to the social aspect of the app.

Both platforms are also free to use when you are sending money using a balance in your account. With that in mind, either can be a good option.

However, Paypal lets you send and receive money using a desktop computer. This is important to consider if you don’t always want to send money through an app, which is the only option Venmo allows.

How do I get money from Venmo?

To get money from Venmo, you need to open a Venmo account. From there, you can accept payments from other people. You can also move money to your Venmo account using a linked bank account.

To get money out of your Venmo account, you can set up a transfer to your bank account. Doing so is free if you are willing to wait up to three days to receive your money.