Payment systems

Venmo Review: Pros and Cons of Choosing this Payment App

Irina Tsymbaliuk
Venmo Review

Peer-to-peer payments are a convenient way to help a friend in need or receive funds from them to your account. The Venmo app allows you to make financial transactions in a couple of minutes. But how else is this program, which has become so popular among Americans, useful? In this article, we will look at the pros and cons of using Venmo and explain in more detail how it works.

What is Venmo and How Does it Work?

Venmo is a mobile app for receiving and sending money to other users' accounts. It lets you transfer funds between your accounts and conduct cryptocurrency transactions. One of the distinctive features of this digital solution is its social networking elements. You can communicate with your friends, send emojis, and leave comments on payments.

What is Venmo and How Does it Work?

But there are many more payment apps on the market, so you first need to know the benefits of Venmo and how it can be useful to you. Besides its compatibility with bank accounts, debit cards, and credit cards, you'll have a bunch of other features, so stick around for a comprehensive Venmo app review.

What Are the Advantages of Venmo?

As statistics show, in 2022, the number of users of the payment program was 77 million, and by 2026, experts predict the figure of 102 million. The advantages of the Venmo app play a crucial role in its rapid popularity growth.

Free App Use

It is entirely free to sign up and open a personal Venmo balance. The app does not charge users monthly or annual fees for its services. Receiving and sending money to a debit card, bank, or personal account is also commission-free. There is a fee only when using a credit card or instant transfer option.

Wide Acceptance and Integration

The pros of the Venmo app also include transferring funds. With money in your Venmo balance, you don't need to leave home to transfer money to another account or pay for a purchase. You won't need an intermediary to send money to a family member or friend's card. Signing up for the app only takes a few clicks to send the right amount to the recipient. 

Venmo provides easy payment for goods and services at companies such as Hulu, Uber, Foot Locker, Poshmark, and others. Thus, you will be able to place your orders quickly and seamlessly.

Convenient and User-Friendly Interface

Convenient and User-Friendly Interface

The simple interface makes it easy for new users to use the app. The settings and options menu has a logical structure, making it easy to personalize Venmo. Visually pleasing graphics and easy-to-read fonts only add to the appeal of this digital solution.

The program has social elements that allow you to attach comments and emojis to transfers. This enables you to communicate with your friends and clarify data for money transfers. Also, if your payments are "public" in the settings, your friends can see when and to whom you have sent funds. So, the social networking component can simultaneously refer to the pros and cons of the Venmo app. It all depends on your personal views on this feature.

Available Debit and Credit Cards

You can submit an application for a Venmo debit or credit card directly on the website. There are no monthly or annual fees for their maintenance. Some stores offer cashback with Venmo debit or credit cards. The card helps you categorize your expenses. For example, the primary category of purchases earns you 3% of the total amount, the second-highest category earns 2%, and the third — 1%.

Please note that if you need to withdraw cash from a Venmo card at an ATM, you can do so without any fees at MoneyPass ATMs. A $2.50 fee is charged at PULSE, Mastercard, and Cirrus ATMs.

Seamless Peer-to-Peer Transactions

The high popularity of the payment program in the USA ensures a simple process of transferring money. Most likely, your close ones already have Venmo installed on their smartphones. This means that you can quickly transfer money to them. You can easily download the app from Google Play or the App Store if you don't have the app on your mobile device. It's quick to install and compatible with most smartphone models.

What Are the Disadvantages of the Venmo App?

We described what are the benefits of Venmo, but to get the full picture, we need to look at its weaknesses.

Privacy and Security Concerns

The main disadvantage for users is privacy issues. The thing is that Venmo automatically sets up public payments for new accounts. When you send money to someone, other users can see the attached message, your name, and the sender's name. The amount of the transaction is also not disclosed. 

The good news is that you can change the privacy settings. To do this, go to the Privacy section and set your desired parameters.

Transaction Fees and Limits

The payment program sets a commission on these types of money transfers:

  • Instant transfers and withdrawal of e-money.
  • Any credit card transaction.
  • Seller's commission.

Venmo also sets transaction limits for all users. For example, for users with a verified identity, the limit for transferring money to a bank account is $19,999.99 per week. The maximum single transfer amount is $5,000. For those who haven't completed the verification process, the limit is $999.99 per week. A similar situation applies to person-to-person payments. Verified users have a limit of $60,000 per week, while unverified users have a limit of $299.99 per week.

No International Transfers

Perhaps, in the future, the owners will expand the range of functions, increasing the benefits of using Venmo, but right now, the app only works in the US with US bank accounts and payment cards. Thus, you cannot transfer money to your relatives or friends abroad. 

Fraud Cases

Fraud Cases

The popularity of the app attracts not only law-abiding citizens but also scammers. There have been cases where fraudsters, using the Venmo name as a cover, demand money from users.

For example, you may receive a certain amount of money from an unknown sender in your account. Then, someone contacts you, claiming they made a transfer mistake and asking you to return the funds. Usually, they provide you with alternative details about where you should send the money. However, the credit card owner can report a fraudulent payment, and Venmo will deduct the same amount from your account again.

Limited Customer Support

Venmo's customer support is limited in its capabilities. In case of a wrong payment, you will be offered to ask the recipient to return the amount to your account. The service can only cancel the transaction itself if the recipient agrees to cancel the transfer, there are funds in their Venmo account, and their account is in order.

However, one of the advantages of using Venmo is that the official site has a Help Center. Here you can learn more about how the app works and read the terms of use. On our website, you can find materials about venmo accounts, how to use it, and how to make a venmo account for beginners.

Conclusion

We looked in detail at what are the pros and cons of Venmo. It's a great option if you don't have a traditional bank account and need to make regular financial transactions. Its ease of use and lack of service fees make the app a profitable alternative to usual bank transfers. 

However, as an app for instant money transfers, it is somewhat inefficient since Venmo imposes fees for this service.

FAQ

Why is Venmo better than Cash?

Both Venmo and Cash are quite similar in features and terms of use. If you're interested only in money transfers to friends and relatives, you should stick to one that is more popular among them. If you’re looking at additional features, Cash is more focused on stock investments, while Venmo provides more cryptocurrency options.

What are the advantages of Venmo?

The main benefits of Venmo are free usage and the ability to send or receive money without intermediaries. You won't have to pay for money transfer services between accounts and debit cards either.

Can I use direct deposits on Venmo?

Yes. To do this, you will need to confirm your identity. Then go to Settings, then Show Account Number, which you must copy to complete a direct deposit form.

Can I get a loan from Venmo?

No, Venmo does not give loans to its users.