Venmo and PayPal are the most popular payment methods on the market, helping you send and receive money quickly. These are also two quite famous payment gateways, allowing your business to accept these two types of payments on your online store when customers make purchases.
Maybe you are wondering between these two services, which one is more suitable for your business? Don't worry, let's learn with PlutusPay how it works as well as the strengths and weaknesses of each service through this article.
Source: Internet
1. What is Venmo?
Venmo is a digital payments platform that allows you to send and receive money quickly and securely. The platform is famous for its social features, allowing users to personalize payment attachments with notes and emojis.
Venmo has evolved from a social payments app into a multi-service destination, allowing individuals and businesses to receive money, make purchases, and even buy virtual currency. Venmo launched in 2009 and was acquired by PayPal in 2013. Currently, Venmo has more than 83 million users.
1.1 How Venmo works
Venmo lets you connect your bank account, debit card, or credit card to send and receive payments. You can split the dinner bill or pay rent through the Venmo app.
Venmo acts like a digital bank account, allowing you to accumulate account balances to use for shopping and money transfers. You can receive your salary via direct deposit to your Venmo account and receive money up to two days sooner.
Venmo account balances are protected by insurance through the FDIC, but only if you fund the account via direct deposit or mobile deposit, or if you purchase virtual currency. Sending and receiving money from your Venmo account or linked bank account is free.
Venmo limits the amount you can spend, deposit, and withdraw each week, and verifying your account increases this limit. With a verified personal account, you can spend up to $7,000 per week on shopping, send up to $60,000 per week, and transfer up to $19,999.99 per week ($5,000 per transaction). translation) into the bank.
With a verified business account, you can deposit up to $25,000 per week and transfer up to $49,999.99 per week to a linked bank account. Limits may apply to each transaction. And because the limit on the number of transfers per week is quite low, Venmo is more suitable for consumers and small businesses.
1.2 How to create a Venmo account:
For personal use:
- Download the Venmo mobile app or visit the website Venmo.
- Sign up with your email address or Facebook account and agree to the terms.
- Provide a phone number to receive the confirmation code.
- Enter the confirmation code into the app or website.
- Link to a bank account to start sending and receiving money.
For business use:
- Download and open the Venmo mobile app or visit the website Venmo.
- Create a personal Venmo account following the steps above.
- Select “Create business profile” after creating your personal account.
- Choose your business type: there are 2 types: sole proprietor or LLC, partnership, corporation, etc.
- Enter your business name, username, and a short description of your business.
- Fill in contact information.
- Review the information provided and press Submit
Advantage:
- Easily send and receive money quickly and shop online.
- Fees are low, unless you make specific transactions or receive payments as a small business owner.
- Debit and credit card services included
Defect:
- Only available in the United States.
- Weekly spending limit of $7,000 for shopping, including in-store payments and Venmo Mastercard debit card transactions.
- Not as widely accepted as other forms of payment such as debit cards, credit cards or cash.
- 1.75% fee (minimum 25 cents, maximum $25) for instant transfer to a bank account or external debit card.
- Privacy settings can be difficult to adjust – transaction history is public to app users.
2. What is PayPal?
PayPal is a financial technology company, providing trusted solutions for sending and receiving money online since the 1990s. To date, PayPal has connected more than 429 million users in more than 200 markets worldwide, while Venmo is only available in the US.
PayPal provides fast and secure payment, receipt, and transfer services, similar to Venmo. However, PayPal focuses more on providing payment gateway services for businesses and payments for buying and selling goods and services.
PayPal has 24/7 account protection, merchant fraud prevention, and other protections for buyers and sellers on their platform. PayPal also allows users to buy and sell virtual currencies directly on their platform.
2.1 How PayPal works
Like Venmo, PayPal allows you to link a bank account, debit card, or credit card. You can keep the balance in your PayPal account and use it to make purchases or deposits later
If you don't have a PayPal account, you can still pay as usual; however, payments will be limited to $4,000 at a time. Verified PayPal users can deposit any amount up to $60,000, although the per-transaction limit may be less. You can create a personal PayPal.Me link to easily share it with friends and family.
PayPal offers various benefits to businesses, such as loans, payment solutions, and the ability for businesses to do business in up to 25 currencies. Similar to Venmo, you can use the PayPal app to pay directly at places that accept this method. If you need to accept payments from customers on your store, PayPal gives you more options than Venmo.
2.2 How to create a PayPal account:
For personal use:
- Access PayPal website or download the PayPal app and select “Register”.
- Select personal account.
- Enter email address and password.
- Fill in your name, address and phone number.
- Link your debit card, credit card or bank account.
For business use:
- Access PayPal.com or download the PayPal app and select “Register”.
- Choose to open a business account.
- Enter your email address and create a password.
- Fill in your business's name and contact information.
- Read the user agreement and select “Create account”.
Advantage:
- Millions of merchants are using this method to accept online payments.
- Available in over 200 countries; allows you to send money globally in up to 25 currencies.
- Offers powerful business tools that make it more convenient for you to receive payments from customers on your store.
Defect:
- PayPal has many different fees that you need to be aware of
- 1,75% fee for instant money transfer to bank or external debit card.
- The interface will be somewhat more complicated than Venmo.
3. Compare Venmo and PayPal
If you are wondering between using “PayPal” or “Venmo” to accept online payments, here are some factors you may want to consider.
Venmo excels at person-to-person (P2P) payments, while PayPal stands out if you're doing business. PayPal stands out with its powerful payment solutions for merchants, while Venmo helps you send/receive money conveniently person-to-person.
Venmo is working to become more business-friendly, and now more than 2 million companies accept Venmo as a form of payment. However, PayPal remains the top choice for enterprise solutions.
Both Venmo and PayPal have mobile and desktop versions that you can use to send and receive money. PayPal is also available on mobile and desktop and allows you to make payments through the app or website. Both keep a record of your transactions, making it easy to keep track of money coming in and going out.
3.1 Depositing money
PayPal can help you send money to anyone in 25 currencies and over 190 countries, as long as you have the recipient's name or their email address. As for Venmo, it will allow you to send money to anyone in the US with a phone. If the recipient doesn't already have a PayPal or Venmo account, they'll be asked to create one. Both services allow synchronization of contacts with applications on the phone.
Regular Venmo lets you send money without fees, as long as you send money from your Venmo balance, bank account, or debit card. If you use a credit card to deposit, you will be charged a fee of 3%.
PayPal allows you to send personal transactions without fees if the money comes from your PayPal balance or bank account, but if you use a credit or debit card, you'll pay a fee of 2,90% plus add a flat fee based on currency. You will also have to pay fees for international personal transactions.
3.2 Receiving and requesting payment:
You won't need to pay any receiving fees for individual transactions on Venmo or PayPal (if no currency conversion takes place).
3.3 Fees between Venmo and PayPal:
One notable difference between PayPal and Venmo fees for most individual users is that PayPal charges 2,90% for individual debit card transactions. Meanwhile, personal debit card transactions on Venmo do not cost anything.
Note: Both PayPal and Venmo charge an additional fee (1,75%) for transferring money to a bank account or debit card. And both charge a fee for sending money with a credit card of 3% on Venmo and 2,90% on PayPal.
PayPal and Venmo also charge fees for business transactions. So if you receive payments as a business owner, freelancer or entrepreneur, you will need to pay additional fees for those transactions.
3.4 Features for businesses:
Venmo has enterprise features that allow small businesses to accept Venmo payments in person or online. At the same time, Venmo also supports QR codes at points of sale (POS). You can set up a Venmo business profile for your small business and receive money through the app the same way you use Venmo to pay friends.
With PayPal, they will provide a more comprehensive commerce system for businesses, with features and services such as point of sale, payment acceptance and invoicing, business debit cards, working capital and business loans, shipping and dispute management and more.
4. Conclusion:
Venmo and PayPal are two of the many simple, fast, and secure ways to send and receive money online. PayPal offers more benefits for businesses at all levels, while Venmo will be more suitable for individual users.
Therefore, if you are in the online business, using PayPal as a payment method will be an unreasonable choice for you. At PlutusPay, we have the Payment gateway rental service with preferential fees, from only 1.5%. If you have a need Rent PayPal payment gateway To grow your revenue, contact us today!
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