How to Use Venmo and How It Compares to Competitors

Unique Features for Sending and Receiving Money

A man and woman use their phones to send money
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Money transfer apps such as Venmo make sending and receiving money simple. But you may not know how to use Venmo or what features are included with this tool. This guide explains everything you need to know to take advantage of money transfer apps and make your financial life easier. 

How to Use Venmo

First, download the Venmo app to your mobile device, and create your free account (it’s available for iOS and Android phones). You can also set up your account online at Venmo.com. You'll need to register with your email address or phone number to get started, or you can use your Facebook login to sign up. 

Once your account is open, you can begin linking your financial accounts to the Venmo app. You can link your bank account information, your debit card, and/or your credit card for money transfers.

To send money with your bank account, debit card, or credit card, you don’t need to verify your identity. But to spend money from your Venmo balance (money you’ve received through Venmo that you haven’t transferred, spent, or sent elsewhere), you must first verify your identity. 

To verify your identity, Venmo may ask for your name, physical address, date of birth, national/tax ID number (SSN/ITIN), or additional documents. This process may take up to three business days. 

From there, you can begin sending and receiving money to friends and family.

Sending Money With Venmo

To send money to people you know, you just need to designate a recipient using their email address or phone number, within the Venmo app. Specify how much money you want to send and where you want the money to come from (i.e., your bank account, credit card account, or Venmo balance). 

Venmo then pulls the designated amount of money from your funding source and transfers it to the person you're paying. To accept the payment, the recipient has to create a Venmo account if they don't have one. Once the money is credited to their Venmo balance, they can then withdraw it to their bank account. 

You can also pay some merchants online with Venmo, including Grubhub, J. Crew, and Seamless, and other retailers that accept PayPal.

Receiving Money With Venmo

To receive payment through Venmo, provide the person sending the payment with your email address, phone number, or Venmo username. They set up the payment on their end, specifying the payment method and amount in the app.

You can also search for a Venmo user by username or real name within the app, select the Venmo user, and “Request” a payment. Venmo then notifies the user, prompting them to approve a transfer of money from their funding account to your Venmo balance.

Note: Important. You must enter a note in the “What’s it for?” field to request or send money. You can even use emojis to indicate that reason if you so choose. 

You then have two options for accessing the money:

  1. You can transfer it to your linked checking account via electronic withdrawal or ACH transfer for free. This can take one to three business days in most cases. 
  2. You can choose an instant transfer to a linked debit card, or your bank account. Instant transfers can be completed in 30 minutes or less, but you will pay a fee of 1% of the transfer value. The minimum is 25 cents, while the maximum is $10.

Venmo's splitting feature makes it easy to share purchases, such as the tab for dinner out, with multiple people. Venmo also integrates with the Splitwise app, allowing you to split rent or other shared expenses.  

Money Transfer Limits

Venmo places limits on what you can send and receive through the app.

Sending Limits 

  • Before you verify your identity, your payment limit is $299 per week.
  • After verifying your identity, the weekly rolling limit for sending funds to other Venmo users is $2,999.99. 
  • The limit for making merchant purchases via Venmo is $2,000 per purchase, 30 transactions per day.
  • The combined weekly limit for sending money or making payments is $4,999.99.

Receiving Limits 

  • The maximum you can transfer to your bank account in a single transaction is $2,999.99.
  • Weekly, the maximum transfer limit to bank accounts from your Venmo balance is $19,999.99.

Venmo and Your Financial Information

As you navigate Venmo, it's helpful to know the included security features. Venmo encrypts customer information and stores data on secure servers. You have the option to create a personalized PIN, which you can use to lock your Venmo account if your mobile device is lost or stolen. 

For an added layer of security protection, enable multi-factor authentication. This will send a one-time code to your phone upon sign-in, or ask you to verify financial information. 

You'll need to set up your privacy settings within the app. The “Public” setting means anyone who uses Venmo can see your transactions, including who you’re paying, and your reason. “Friends Only” means your friends (and the person you're transacting with) are the only ones who can see purchases or payments. “Private” limits transaction sharing to you and the other person you're exchanging money with. Choosing how you want your transactions to be displayed (or not) allows you to maintain the level of privacy you want.

What Fees Does Venmo Charge? 

The good news is that Venmo offers several free features. For example, it won't cost you anything to:

  • Send money from a linked bank account, debit card, or your Venmo balance
  • Receive money into your Venmo account
  • Transfer money from your Venmo account to your bank account
  • Maintain your Venmo account monthly or annually 

As already mentioned, you will pay a small 1% charge for instant transfers from your Venmo account to a linked debit card or bank account. If you use a credit card to pay others, you'll incur a 3% fee each time you use it to send money. 

Venmo vs. Other Money Transfer Apps

Venmo isn't the only app that allows you to send and receive money. Here’s how the app compares to its main competitors.

  Transfer Speed Fees Other Features
Venmo 1 to 3 days standard; 30 minutes or less for instant transfers Free to send and receive money via bank account or debit card; 3% fee applies to credit card payments Venmo offers its own Mastercard debit card for easy access to your Venmo balance
Zelle 1 to 3 days for standard transfers; instant transfers can be completed in minutes No fees to send or receive money via bank account or debit card Many banks and credit unions feature Zelle as a preferred person-to-person money transfer service
Popmoney 1 to 3 days for standard transfers; no instant transfer option No fees to receive payments or pay a request; $0.95 fee to send or request funds

U.S. checking or money-market account or debit card required; no credit cards


 
PayPal 1 to 4 days; instant transfer to bank account or debit card is available Standard bank account transfers are free; instant transfer fee is 1% or $10 maximum; 2.9% fee plus a per-transaction surcharge for payments made by debit, credit card, and PayPal credit Widely accepted by, and works with, many online vendors and merchants
Facebook Messenger Up to 5 days; no instant transfer option No fees to send or receive payments Must use a bank-issued debit card or PayPal account; no credit cards
Square Cash App 1 to 3 days; instant transfers are an option. No fee to send or receive payments using a linked bank account or debit card; 1.5% transaction fee applies to instant transfers Get instant discounts when you use your Cash Card to shop at selected merchants
 
Google Pay 1 to 5 business days; instant transfers are available No fees to send or receive money, when person-to-person Works with debit cards, credit cards, and U.S. bank accounts, depending upon your location and type of entity you’re paying; can only use debit cards and U.S. bank accounts to pay people

In terms of ease of use, these apps are all fairly similar. With regard to features, Venmo offers a bit more with a Venmo Mastercard debit card, which you can use to make purchases or cash withdrawals at ATMs from your Venmo balance. You can, however, get a debit card through PayPal or the Cash App as well, so that feature isn't necessarily unique. 

The Bottom Line: Is Venmo the Best Money Transfer App?

Once you learn how to use Venmo, you may be wondering whether it's the best option for sending and receiving money. Cost-wise, Venmo is very affordable, with the exception of using credit cards to make payments. On the other hand, not all money transfer apps even allow credit card use so it may be important to you to have that feature available if needed. Overall, Venmo can be a quick and easy way to send and receive payments from your mobile device, with minimal fees. 

Article Sources

  1. Venmo. "Bank Accounts and Cards," Accessed Nov. 25, 2019.

  2. Venmo. "Business," Accessed Nov. 25, 2019.

  3. Venmo. "Fees," Accessed Nov. 25, 2019.

  4. Venmo. "Payment Limits," Accessed Nov. 25, 2019.

  5. Venmo. "Security," Accessed Nov. 25, 2019.

  6. Venmo. "Payment Activity and Privacy," Accessed Nov. 25, 2019.

  7. Venmo. "Fees," Accessed Nov. 25, 2019.

  8. Venmo. "Venmo Card FAQ," Accessed Nov. 25, 2019.