Depending on the types of trades conducted, selecting the best digital payment software is necessary
There are many digital solutions available to you when you need to give someone money or receive payment from them. However, PayPal and Venmo are the two market leaders, to the point where both have started to be used as verbs, as in “PayPal me” or “Venmo me.”
The kind of transactions you want to do and the persons you want to exchange money with greatly influence which option you should pick properly. With Venmo, you can also make your payments more socially engaging for personal transactions with individuals you know, like paying your babysitter or splitting the tab at a restaurant with pals.
But the two payment services do have certain similarities. We compared their features, costs, speeds, and adaptability in-depth so that you would have all the knowledge necessary to make an informed decision.
PayPal vs. Venmo: A Comparison between Venmo and PayPal
PayPal vs. Venmo: Accessibility
The majority of consumers will go to their respective free applications for iOS and Android to use PayPal and Venmo. Each of them also has a desktop version that runs in a browser. PayPal payments can be made using the website or the app, however, Venmo payments can only be started through the mobile app.
Several different online retailers accept PayPal as payment, and it can also be used to make in-store QR code transactions. Venmo is aiming to expand this merchant transaction capability among additional retailers, but in comparison to PayPal’s incredibly wide footprint, its reach is currently quite constrained.
Sending Money with PayPal vs. Venmo
On both apps, the method for sending money to someone is remarkably identical. Both allow you to integrate your contacts with the app so that it may look for any linked PayPal or Venmo accounts that your friends and family may have. You can still send money to contact even if the program doesn’t surface their username, email address, or phone number.
Both PayPal and Venmo will inquire about the preferred payment method once you select the recipient and the desired amount.
If each service has a positive balance for you, you can use that money to make your payment. If you choose another payment option, money will be taken from the bank account, debit card, or credit card you choose as your preferred mode of payment for this transaction.
After you click “send,” the money will appear in the recipient’s Venmo or PayPal balance within a few minutes, sometimes even immediately. Since the firms won’t reimburse you if you transfer money to the incorrect recipient with either app, you should double-check that you are sending money to the correct recipient.
PayPal vs. Venmo: Asking for Money
Both Venmo and PayPal allow you to receive money from other people. Using Venmo, you can ask another person for money, remind them to send you money, or give them quick access to your contact information and the required amount. You can safely request funds using PayPal and edit a message before sending it. Only other PayPal users are capable of making requests.
The money will almost instantly appear in your PayPal or Venmo balance once the person who receives your request for payment responds by making a payment. You can then either store those monies in your account for later use or move them out to your associated bank account. You can also utilize those funds to make a subsequent payment (or, with PayPal, a merchant purchase).
Both PayPal vs. Venmo gives you the additional choice of how quickly to finish the transfer if you choose to transfer money to your bank. You can select a transfer without paying a fee; but, it may take up to two or three days for either app to finish. Both Venmo and PayPal let you choose an immediate transfer for a nominal cost if you’re in a hurry.
PayPal vs. Venmo: Costs
The costs of the two services are comparable. Both provide free payments from associated bank accounts, and both levy a fee of roughly 3% when using a credit card. Where they diverge significantly is that PayPal only permits fee-free payments made straight from a bank account, but Venmo extends its no-fee option to payments made through debit cards. PayPal’s fee for debit and credit card transactions is officially 2.9 percent + 30 cents. On their websites, you can learn more about Venmo and PayPal’s fees.
Payments made with American Express are an exception to the fee on credit card transactions. American Express is now allowing free payments through both Venmo and PayPal, but the payment must be started through the American Express app rather than one of the other two services. However, by doing so, users can pay with a credit card and skip the roughly 3 percent transaction cost.
There are free options on both sites for how quickly you want to transfer accrued funds from your PayPal or Venmo balance to your bank account.
You can choose a free standard transfer speed of one to three days with Venmo or PayPal, or you can upgrade your transfer to happen instantly for a cost of 1.75 percent of the amount being transferred. Both services set a minimum price of 25 cents and a transfer fee cap of $25.
PayPal provides a variety of pricing options for businesses using PayPal to accept payments from customers. Venmo, on the other hand, is not designed for merchant business transactions and imposes a transaction cap if it determines that users are using a personal account for commercial purposes.
PayPal vs. Venmo: Limitations
PayPal has a significant benefit for customers looking to send very large transfers. Typically, single payments are permitted up to $10,000 apiece, with a maximum of $60,000. That exceeds Venmo’s cap of $6,999.99 for a rolling seven-day period by a wide margin. In addition to having lower restrictions, Venmo also conducts identity verification before granting access to these limits. The maximum transaction amount is $299.98 up until that point.
PayPal vs. Venmo: Extra Features
Comparing PayPal with Venmo: Extra Features
As you can see, the two providers display their fundamental features and pricing rather similarly. However, there are a few instances where the two programs diverge significantly. Venmo, for example, displays a social feed of transactions that have occurred among people you know as well as those of strangers if you choose to browse the public feed. Venmo places a major emphasis on transactions between people who know each other personally.
You can see who paid who and with what note by browsing the feed of transactions made by your Venmo friends. The sum is the only thing that is lacking. Emojis, which are almost as frequent as text in the Venmo social feed, are also supported. By default, when you create your own transactions in the app, they are shared openly. However, you may adjust this worldwide or for each individual transaction to limit access to your Venmo pals or just the recipient.
PayPal’s advantage over Venmo is that it can be utilized by both customers and buyers at brick-and-mortar and online businesses, as well as merchant sellers who accept payments.
PayPal also facilitates transactions abroad. PayPal is the go-to app for people who want to send or receive money from people outside of the United States because it supports more than 200 countries and transactions in around 25 different currencies. While Venmo is restricted to transactions within the United States,
Finally, although Venmo’s offering in this area is still developing, both Venmo and PayPal provide their own credit and debit cards. By getting a debit or credit card, you can charge purchases to anyone who accepts that card type directly from your PayPal or Venmo account.
PayPal vs. Venmo: Comparing PayPal and Venmo for Business
PayPal offers a wealth of small business options that are completely absent from Venmo’s more person-to-person centered business model, further solidifying its image as the digital payments app of choice for retailers.
Those who open a PayPal Business account, for example, can use the service to basically set up the financial transaction side of online sales, making it simple to take credit and debit card payments from customers around the world. Merchants consent to having a modest percentage fee deducted from each transaction in exchange for this capacity.
However, PayPal’s assistance for small businesses extends much beyond simply processing payments. Additionally, PayPal Business provides assistance with billing, product shipment, and marketing intelligence. A PayPal Payments Pro account, which requires a monthly maintenance charge, is required to use some services, while the free business package only offers access to others.
The availability of working cash and business loans from PayPal is particularly advantageous for expanding firms.
Reviews of PayPal vs. Venmo
Both the Venmo and PayPal applications have excellent ratings from independent third parties. Reviewers praise the products’ usability, aesthetics, and simplicity in processing payments and requests.
PayPal vs. Venmo: What Are PayPal and Venmo?
BothPayPal vs. Venmo is digital payment methods that are mostly used as smartphone apps. The process of making a payment with Venmo or PayPal is similar to writing a check in that both take funds from associated bank accounts. However, there are two contemporary changes.
First, the user can select their primary checking account, a secondary savings account, a debit card, or a credit card as the source of funds when sending money through Venmo or PayPal. Second, unlike checks that must be cashed and potentially bounce due to inadequate money, the transfer of funds happens almost instantly.
Due to its establishment in the late 1990s and subsequent transformation into the payment method that facilitated millions of eBay transactions, PayPal is the industry pioneer in this regard. In comparison, Venmo is a newcomer to the scene despite being a hit. Founded in 2009, Venmo was purchased first by PayPal, then by Braintree three years later in 2012.
PayPal vs. Venmo: How Do PayPal and Venmo Function?
Both services have the same setup and fundamental functioning. You establish your security credentials by creating a free account with the provider. The next step is to link at least one bank account for transfers and then add optionally additional payment options, such as debit and credit cards or other bank accounts.
When you’re ready to make a payment, you enter or search for the recipient’s contact information, input the payment amount, and select the payment method. PayPal does not have a “request” button, although it still lets you receive money. Venmo has a button that lets you request money rather than send it.
For those choosing to use a debit or credit card, the payment amount will be posted to your statement like any other purchase while those using PayPal and Venmo fund your payments by initiating ACH transfers to and from your associated bank account.
PayPal vs. Venmo: Who Should Use PayPal or Venmo?
Venmo is the best option for people making mostly private payments to people they know and trust. Making payments using Venmo and viewing exchanges among your connections feels nice and approachable thanks to its social interface.
You can pay your friends and relatives with PayPal as well. Whichever platform more of your contacts use will determine which one is better for you.
However, if you sell goods or frequently pay for online transactions, a PayPal account will be of far greater use to you. Despite starting to construct a Venmo Business account, the service is still in its infancy.
PayPal vs. Venmo: How We Compare PayPal and Venmo
We examined PayPal vs. Venmo terms on features, payment transaction fees, bank transfer fees, transaction limitations, and business/merchant offers to help you understand when each of the two digital payment apps makes the most sense. It should be simple to determine which app would best meet your unique needs by comparing them side by side, or you may decide that having an account with each is the best solution.