Everything you need to know about Venmo
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Raise your hand if you're always the one whipping out your Chase Sapphire Reserve® and insisting to pay for all of your friends' meals at dinner. It's not that you're rich — you just enjoy earning those 3x bonus points for dining and want your friends to pay you back later. The popular money transfer app Venmo lets you do just that. The service allows you and your friends to send each other money quickly and easily and is one of the most widely used mobile payment apps today. In this article we're going to run down every aspect of Venmo, from fees to transfer times, so you can navigate the system with ease.
What is Venmo?
As mentioned above, Venmo is a money transfer service. Originally operated by Braintree, the company was purchased by PayPal in 2013 and remains with them today. The main features that differentiate Venmo from other services are its mobile-oriented design (it does not have a web feature) and a social media-esque news feed that publicly shows transactions you make. This means people you are connected to can see transactions and comment or react to them.
How does Venmo work?
Venmo works by linking your bank account, debit or credit cards to a Venmo account. Your information is saved in your account, and you can choose at any time to send money to contacts or even some businesses. You don't need to maintain a balance in your account, either. You can simply send money in a transaction and it will debit your linked cards accordingly. It's worth noting that you can send money from your bank account, balance (if you have one), or debit card for free. For credit cards, there is a standard 3% fee per transaction.
Once you've received money, you'll need to send a request to transfer the funds directly to your bank account. You can't withdraw money to a credit card. Venmo also takes safety seriously; it uses encryption for all your transactions to keep your money safe.
How long does it take to get my money?
While Venmo isn't as quick as simply handing your friend a wad of cash, it takes the inconvenience of heading to the bank to deposit your money out of the equation. Generally speaking, transferring money from your Venmo account to a bank account takes one to three business days, though there are several different reasons it can take longer. Venmo's website outlines the following:
- If you requested the bank transfer on a weekday (Monday–Friday) before 7 p.m. ET, the bank transfer could reach your bank account as soon as the next business day (it could take up to three business days to arrive).
- If you requested the bank transfer on a weekday (Monday–Friday) after 7 p.m. ET, the bank transfer will initiate on the next business day. It could then reach your bank account as soon as the business day after that (it could take up to three business days to arrive).
- If you requested the bank transfer on a weekend (Saturday or Sunday), the bank transfer will initiate on the next business day (likely Monday). It could then reach your bank account as soon as the next business day after that (as early as Tuesday; it could take up to three business days to arrive.
Can I earn rewards using Venmo?
The short answer is yes. There are a couple of different ways you can earn rewards. The first is via the Venmo debit card, which is a Mastercard. You can use it just like a regular debit card, and Venmo will give you cash back at certain retailers. This is a fairly new program powered by Dosh that launched with common retailers such as Target, Sephora, Chevron and Sam's Club. With rates as high as 5% cash back, you're doing pretty well for a free card.
You can also use your credit card through Venmo, though as mentioned before you will incur a 3% fee whenever you do so. If you're trying to meet a sign-up bonus or other spend, this may work, but otherwise, it's probably not worth it to use a credit card. It's also important to check your card issuer, as some banks code Venmo as a cash advance, which means may not earn any rewards at all.
If your purchase or money transfer with Venmo codes as a cash advance on your credit card, you'll also pay additional fees. It's worth doing a small transaction to simply test it out first, in order to see whether the purchase codes as a cash advance with your particular credit card. If it does, you could pay an average of 3% to 5% extra in fees — on top of not earning rewards with your credit card.
How do I get Venmo?
Venmo is available as an app on both Android and iPhone. While it has a website on which you can sign up, you aren't able to send or receive money. That feature is dedicated to the app, which is both well-designed and intuitive.
Once you sign up for an account and link your bank, Venmo goes through a verification process. If you're able to input your bank username and password, the service can verify your account almost immediately. Otherwise, it will take a few days as it deposits trial sums into your bank account, which you then report back.
Once your account is live, you can add contacts by linking your Facebook or contacts list, searching via username, or even generating a QR code for you to scan.
Venmo is an easy-to-use service that caters to mobile users. It's free for most transactions involving money transfers, though you can incur fees when using a credit card. It has a simple rewards program that offers cash back for those who participate and does its part to keep your information secure. All in, it's a good option for just about anybody.