With a digital world that is improving day after day with many things that come up, Banking has also taken a different dimension for some time now and is still improving. Many people have gone for online banking options rather than physical banking options due to several advantages one gets from using online banks.
They are now called Online banks or P2P money transfer apps. Their main function was first of all to send and receive money but they have come to be able to store cash though many won't advice you to store cash in these platforms due to several scams that are found in these platforms.
Some Online P2P transfer apps that you can see are Paypal, Cash App, Zelle, Apple Pay, Google Pay, and many others. With these apps, you can send and receive cash and also temporarily store cash in them for future use.
And so, Venmo is one the very much liked online money transfer apps like Paypal, Cash App, Chime, and many others. And Venmo is also used to send and receive cash online working 24h/24 and everyday of the week.
And so, in this article, we will be emphasizing on Venmo and showing you some things about Venmo that will interest you and make you know more about Venmo. If you are new and want to know more about Venmo before engaging in the platform, then you are at the right place. Keep on reading to know much more.
Table of Contents
What is Venmo?
Venmo is an online P2P banking app that is owned by Paypal and that is based in the US(America). With Venmo, you can send and receive money from friends, family members, business partners, and any person with a Venmo account too.
But one thing is to make sure you know the person you are sending or receiving money from due to different scams.
You can send money from your debit card, credit card, bank account, or your Venmo balance. And when you receive the money, you will see it in your Venmo Account balance.
How does Venmo Work?
Venmo works in a very easy way; Send, Receive, and store cash. That's it; you can send, receive cash and also temporarily store cash in it. And if you have money in your Venmo account and think the cash is not safe in there, then your bank account should welcome the cash at anytime since you can just link them both and send money to your bank account easily.
Another feature that Venmo offers is splitting of funds. For example, you are in a class project with your classmates; With Venmo, you can easily split up the expenses and then use that splitting to pay and use the combined money for any of your project's purchases.
There could also be a quick transfer method. That is the social media linking; You can add up a friend after a transaction with that friend and next time you want to send to that friend, you will just select from the friend list instead of restarting the filling of the account details. It is weird but important for people who might separate paths.
Venmo payments are also customizable. You can go to your settings and decide who has to see your transactions; whether the receiver and your self only, your friends only, or any one(public). It will be up to you; but it is safer when it's just your receiver and yourself who can see the transactions since of multiple scams on the internet.
Is Venmo Safe?
Well, it is normal to ask this question with the multiple number of times we've spoken about scams. On this blog, we always try to assure our readers to be safe. And one of our very important policies is "Prevention is Better than cure".
Yes there are scams on Venmo but the same way, there are ways to bypass these scams if you know what type of scam you are facing.
But not thinking of that, Venmo is a safe platform since Venmo uses data encryption technology to protect their users from unauthorized transactions while storing user information on servers in secured locations. Venmo also provides users the option to log out of lost or stolen phones and to set up personal identification number (PIN) codes for mobile applications from another device.
Common Venmo Features
Here are some important features about Venmo below;
- Data Synchronization
- ACH(Automated Clearing House network) Payment Processing: A payment system done between credit/debit cards and bank accounts
- Debit/Credit Card Processing
- Customer Engagement
- Mobile Access
- Data Security
- Electronic Payments
- In-Person Payments
Pros and Cons of using Venmo
- Quick, and very convenient payments
- Offers a debit card and a credit card for online transactions
- Free to send and receive money from a bank account or debit card
- Can pay for purchases at selected businesses
- Low fee for credit card payments
- Adds a social element to sending and receiving money
- Payments are public by default(though it can be changed in the settings)
- Popular with scammers
- Can't cancel payments(So make sure you know who you are sending money to and when to send the money)
- No international transactions
How to Setup a Venmo Account
It's not difficult to have a Venmo Account. Follow the steps below;
- First of all, you have to download the Venmo App on App store(iOS) or Play Store(Android), or Go to the Venmo Site.
- Then, you should launch the app, or click "Get Venmo" on the site.
- Sign up with your Facebook account or email address and agree to the terms and conditions.(You will get this now for mobile users, but for those using a PC, you will have to verify your Phone number first before this).
- Then you have to verify your Phone number for Two-way Verification
- After verifying your account with the phone number, you will then be prompted to add your bank account to ease sending and receiving of cash(This is a very important steps).
Well, these steps are for those wanting just a Personal account. You can also request a business account. For a business account, you will have to complete the above processes first and then do the following;
- Then select the button that says “create a business profile.”
- Choose whether you operate as an individual (sole proprietor) or a registered business (LLC, partnership, corporation, etc.).
- Fill in the required informations; including your business name, username and a short description of your business.
- Fill in your contact details.
- Preview your profile and publish.
Venmo is not a very expensive platform when it comes to fees unlike other P2P transfer apps like Paypal. For a transaction when having a personal account, you won't be charged any fee for a normal transfer. But the instant transfer has a fee of up to 1.75%.
The normal transfer will take up to one week (from 3-5 days)to be completed meanwhile the instant transaction is done immediately within 5minutes maximum.
Also, Venmo has a debit card and if you are using it for payments, then you will be charged at 3%. And apart from that, you won't see a lot of fees on Venmo again.
Venmo is an amazing online P2P transfer app that is very much recommended. But the only thing that many people do run away from on Venmo are scams and transfer periods(for normal transfers). But for scams, as long as you know how the scammer has come at you, you can easily know how to avoid them and get away and keep your cash.
All is about having the necessary knowledge and we've provided and article above that shows you how to avoid all the different Venmo scams.
Venmo also is easy to setup. If you found Venmo cool after this review, then why not just setup your own account and have your own Venmo account. We've shown you how to get a Venmo account for Personal use or for Business inquiries.
Some Frequently Asked Question(FAQs) on Venmo
Here are some questions and answers to assist you in this search for knowledge.
1. Is Venmo FDIC insured?
It depends on how you use your account. Venmo is not a bank, and keeping money in your Venmo balance is not the same as keeping it in an FDIC-insured bank account.
However, if you use direct deposit for Venmo, that money is transferred to and held by each service’s bank partner, where the funds are eligible for FDIC pass-through insurance up to the applicable limits. If you want the security of FDIC insurance, make sure your Venmo deposits are eligible.
2. Can I withdraw cash at an ATM from my Venmo account?
Yes, if you have a Venmo debit card set up for the account. The Venmo debit card offers free ATM withdrawals from MoneyPass ATMs within the U.S.
3. What security features do Venmo offer?
Venmo uses data encryption services to protect your account information. You can also work with Venmo to set up multi-factor authentication or create a PIN for your account. And with a very strong password, your account will be safe(you can search and get the best way to write a strong password).