Venmo Vs PayPal

Venmo Vs PayPal

So you want to make fast, free payments easily.

You’re in the right place.

While Venmo Vs PayPal is owned by PayPal and they can do many similar things.

They are very different.

Comparing Venmo Vs PayPal is great to understand because they can serve very different needs and we will show you what works best for you!

Disclosure: This post may contain affiliate links and savings on transfers if you use some of the links! For more information, see my disclosures here.

Venmo Vs PayPal in 30 seconds

Venmo is a peer-to-peer digital payment app designed to instantly send money to friends, family, and trusted businesses in the US locally.

Venmo doesn’t offer many things PayPal does, but it is simple, powerful and (sometimes) free for US payments.

PayPal has evolved to be a major player in global e-commerce (as a payment gateway), while retaining its ability to process domestic transfers between friends and family in the US as well as overseas (in 27 currencies).

Venmo

Venmo Likes:

  • Easy bill splitting for rent, nights out, etc. between friends and family
  • Pre-paid Venmo debit card with free ATM withdrawals and touch-free shopping
  • Venmo Visa credit-card with personal QR code (easy to get paid)
  • Pay trusted businesses who accept Venmo payments
  • Transfers between Venmo members are free
  • Engaging social feed of payments
  • Invest in cryptocurrencies

Venmo Dislikes:

  • US only
  • Can only send $299 per week if identity is unverified
  • Primarily app based payments

PayPal

PayPal Likes:

  • Free to send money to friends and family in the US with a linked bank account
  • Many online merchants accept PayPal and offer fee-free payment plans
  • International transfer for personal and business in 27 currencies
  • Can hold money in PayPal wallet
  • Shop online with PayPal MasterCard debit card (also works offline)

PayPal Dislikes:

1. Fees & Hidden Costs

Venmo

  • No fees to open and hold an account
  • Free transfers to other Venmo users from your linked bank account and debit card
  • 3% fee applicable for payments funded by a credit card
  • Standard withdrawal of balance to bank account is free (takes 1-3 days via ACH)
  • Instant withdrawals are chargeable – 1.5% of the amount (minimum $0.25 fee, maximum $15 fee)
  • No fees for ATM withdrawals in the MoneyPass network
  • Out-of-network withdrawals cost $2.50
  • No fees to replace your debit card
  • Fees applicable for buying and selling cryptocurrencies

PayPal

  • No fees to open and hold an account
  • Free transfers to other PayPal users in the US from your linked bank account or PayPal balance
  • Fees applicable when funding your payment with a card: 2.90% of the amount + fixed fee (in the US)
  • No fee for standard withdrawal to bank account
  • 1.5% fee applicable for instant withdrawals
  • 1.5% fee applicable for instant withdrawals to a card
  • Free to donate or to pay for a purchase unless it involves a currency conversion.
  • Sending money abroad with PayPal will incur relatively high fees, including sending and receiving fees, currency conversion fees, and PayPal’s service fee. Learn more here.

2. Which is Safer?

Venmo

  • Owned by PayPal and thus licensed to do business in all 50 US states
  • Two factor authentication on app
  • Any unauthenticated transactions are immediately red flagged
  • Difficult to get money back if sent to the wrong number

PayPal

  • Licensed to do business in all 50 US states
  • 128-bit SSL technology and two-factor authentication on their website and app
  • Performs server checks to make sure customers are using an approved browser (supporting SSL 3.0 or higher) for online payments
  • Strong purchase protection program for buyers – follows the PCI DSS protocols also used by credit cards

3. Sending & Receiving Money

Venmo

Sending money

  • Easily send money to synced contacts
  • Venmo user not showing up? Send money to their phone number or email address
  • Send money with linked bank account, balance, or debit or credit card (more expensive)
  • Split expenses with reminders from contacts

Receiving money

  • Set up reminders to receive money
  • Set up direct deposit to receive your salary (FDIC-insured up to $250,000)
  • Businesses can set up a business profile on the app and request money
  • Trusted businesses also offer Venmo as a payment method offline and online

PayPal

Sending money

  • Easily send money to your PayPal contact’s registered email
  • Set up the payment with bank transfer or PayPal balance (free). You can also use your debit or credit card, which can attract a fee
  • Send money to a bank account abroad by typing in the user’s email

Receiving money

  • Send a payment request to your contact’s email or phone number
  • Share your Paypal.me link for easy payment
  • Set up direct deposit for your salary
  • Businesses and freelancers can send an invoice to receive payment
  • E-commerce businesses can also embed PayPal on their e-shop or website

How to Send Money from Venmo to PayPal

Even though Venmo is owned by PayPal there is no direct way of doing this, but there is a way:

  1. Link a bank account to both Venmo and PayPal. (In Venmo, go to Settings and select Payment Methods. In PayPal, go to Link a bank)
  2. Once linked, go to Venmo and select Transfer to Bank and enter the desired amount
  3. Go back to your PayPal account then continue to the Transfer Money option and Add money to your balance

4. Customer Service and Support

Venmo

  • Phone support every day of the week
  • Email support
  • In-app live chat
  • Service-specific FAQs

PayPal

  • Phone support
  • Community support
  • Extensive FAQs
  • Text support

5. Reviews of Others (inc. Negative Ones)

Venmo

Venmo is rated 1.3/5 on Trustpilot with 300+ reviews.

Positives

  • Easy to send money
  • Safe and trustworthy service

“Made a mistake and sent the money to the wrong person. Called Venmo customer service. They corrected it immediately. Great customer service! Would highly recommend!”

– R Ramsey on Trustpilot

Negative

  • Customer service

Customer service is a major issue for Venmo users – from being difficult to get hold to being unable to provide helpful information, the maximum strikes against Venmo comes from their customer service issues.

PayPal

PayPal is rated 1.6/5 on Trustpilot with 200+ reviews.

Positive

  • Professional and quick service
  • Helpful for international payments
  • Purchase protection for online payments

“Excellent service professional and quick”

– Karoline on Trustpilot

“PP is extremely convenient for international payments”

– Andrew A on Trustpilot

“I use PayPal as a matter of choice when purchasing anything online. If an item didnt arrive or I’ve had a problem with a product or refund. PayPal sorts it. I would never buy anything online without using them. Excellent service”

– Rita Radcliffe on Trustpilot

Negative

  • Customer service

PayPal’s customer service is also difficult to get hold of and not helpful when it comes to solving pressing problems.

  • Account limits

Typically, you can receive about $2000 USD in your PayPal account. If you receive more, this amount is held by PayPal till you offer more documentation and request to increase the limit.

Essentially, PayPal is good for receiving small amounts if you’re a freelancer or a small e-commerce business.

6. Cool extras

Venmo

  • Venmo pre-paid debit card powered by MasterCard for offline and online payments
  • They also offer a credit card powered by Visa
  • Bill splitting
  • Direct deposit for receiving salary
  • Investing in crypto currencies
  • Social feed for payments

PayPal

  • Pre-paid Mastercard for online and offline payments
  • Interest-free payment plans for online purchases
  • Direct deposits for salary
  • International transfers in 27 currencies

Quick note: Sending money abroad with PayPal is very easy and can be affordable if you’re funding it with your PayPal balance. However, they’re usually not the best option.

For small transfers abroad (below $7000 USD/£4000 GBP/€4500 EU/$9500 CAD/AUD) we recommend Wise (review), WorldRemit (review), or Remitly (review). Wise is one of the most transparent options for international bank transfers, while WorldRemit and Remitly let you send cash abroad at an affordable rate.

For large bank transfers abroad (above $7000 USD/£4000 GBP/€4500 EU/$9500 CAD/AUD), we recommend either OFX (review), or CurrenciesDirect (review).

Verdict

With 1 win each for PayPal and Venmo and 4 ties, it can be difficult to say which is best.

We recommend going for Venmo if you want to pay friends and family in the US as well as trusted businesses that offer Venmo as a payment option (like UberEats, Abercombie and Fitch, etc.).

PayPal is preferable if you shop online from both US and international e-commerce stores and need purchase protection for these transactions. PayPal can also be used to send and receive small amounts from abroad (however, fees may be high).

Which digital payment service is right for you ultimately depends on your specific needs.

Why is Venmo Popular?

Venmo and WhatsApp have grown like crazy through the network effect which happens organically like Facebook and other social media platforms

When Should You Avoid Venmo?

– To accept payments for goods and services you need to get authorized
– If you want to send money overseas
– If you want to earn interest on deposits

How Does Venmo Make Money?

Venmo is mostly free except if you use a credit card to send money. Using a credit card incurs a 3% fee which partly goes to Venmo.

Should You Use Venmo or PayPal

Venmo is designed to be a inexpensive and easy App to pay family and friends where as PayPal can do a lot more including business.

Happy Money!

Similar Posts

Leave a Reply