Venmo For Business: Ultimate Review in 2021
In the past few years, Venmo has become a common way to request money, pay friends, and simply divide checks. Besides, it is also becoming hugely well-known as a virtual payment system for businesses.
If your small business has already processed payments online and accepted credit, you might want to know more about the Vendor and what it provides compared to other digital wallets. So it’s crucial for you to follow the following article carefully Venmo for Business: Ultimate Review in 2021.
Table of contents
- What is Venmo and how does it work?
- How to use Venmo for business?
- What are the best features of Venmo for business?
- Should you use Venmo for your business?
What is Venmo and how does it work?
Venmo is a banking app on mobile devices, allowing users to link a credit or debit card and send money to other people. When a payment is finished, it pops up on an overall feed and a user’s feed unless it has locked their settings. This can help users track their payments - in a similar format as mobile banking apps - and even to like and comment on your friends.
The free marketing part of a feed that provides users’ purchases and payments is attracting a lot of small-sized businesses. If their settings are not private, all the followers and friends of a customer will know that he or she supports your business whenever he or she pays you on Venmo. According to a study, word of mouth is the most effective way to generate new customers, and Venmo gives you a digital version of that.
Venmo offers immediate payments and helps create a social presence. Besides, this app provides several great features for businesses. However, with every payment processor, the app charges merchants a fee - 2.9% and 30 cents per transaction.
How to use Venmo for business?
Venmo is both clear and embarrassing about what types of businesses are qualified for using Venmo payments. For instance, Venmo doesn’t provide a list of prohibited businesses. Meanwhile, Venmo also claims that the app can be utilized to buy items directly from joining approved apps and online stores.
Remember that you can’t to build Venmo acceptance into your site or app. You have to use Braintree or PayPal for payment processing to include this option. Braintree states that the below use cases are not allowed:
- Selling products or services in person
- Get payment for products or services via the Venmo app
- Supporting peer-to-peer transactions between two different Venmo users.
It means you cannot use Venmo directly to handle payments. For instance, if you sell any kind of goods, your customers cannot send you money through Venmo. If you’d like to use Venmo for payments, you have to take some steps and create the payment option into your site or app.
Besides, it also means you can’t create a service that tells, “You send us the money, and we’ll send it to somebody else for you.”
The final requirement is that your business must be based in the US. This app is not available to users in any other country.
Option 1. Accept Venmo through Braintree
Braintree Payment Solutions is a merchant service supplier, concentrating on online and mobile payments. Venmo belongs to Paypal, and its offerings work very smoothly with PayPal’s, but it is a different entity. For instance, you have a traditional merchant account. Braintree is available worldwide, and it supports a wide range of payment choices in apps and on the web. Consequently, it will take a developer to process Braintree payments and take advantage of the Braintree platform.
To use Venmo, there’s a must to use one of the SDKs below:
- iOS v4
- Android v2
Lastly, Braintree has standard pricing for Venmo transactions. Most vendors will need to pay 2.9% + $0.30 a transaction unless they have already had special pricing. It’s easy for you to identify Venmo transactions in your dashboard by searching for the Venmo logo in the payment option.
Option 2. Accept Venmo through PayPal Checkout
If you’re not interested in Braintree, you can accept Venmo by using PayPal Checkout. If you add payments to an eCommerce shopping cart or offer PayPal as an additional option to another credit card processor, Checkout is perfect. Bear in mind that PayPal is a third-party payment processor and goes with a risk of account instability - the possibility for holds on funds or even account freeze whenever PayPal’s system detects any suspicious activity.
With this option, you’ll need a developer and code work. Checkout has been upgraded with “Smart” customizable payment buttons and contextual tools that will show many checkout choices - PayPal, PayPal Credit, or Venmo - according to what it knows about a client. Venmo is exclusively available on mobile devices. You also need to remember that PayPal checkout doesn’t permit you to accept Venmo as a stand-alone payment option. If you want this feature, you should use Braintree instead.
PayPal Checkout charges you a fee of 2.9% + $0.30 per transaction for most sellers. Remember that PayPal provides a micropayment choice for sellers whose average transaction sizes are less than $10.
Furthermore, it’s essential to know that as Venmo belongs to PayPal, every Venmo transaction is applied to PayPal’s Seller Protection policies. For purchasers, Venmo offers its protection policy, although there are several discrepancies. Venmo provides its terms and conditions for sellers in the user agreement if you want to know more about it.
What are the best features of Venmo for business?
There are a number of reasons for small business owners to jump on the Venmo train. Here’re some of the best features Venmo offers to businesses.
As simply integrated online, Venmo is a perfect choice for online retailers. They can use Venmo as a new method to generate sales. It includes a familiar, simple-to-use payment system that younger clients will apprehend and use.
ARekha Panda - the founder of RAEKA Beauty claimed that they chose to use Venmo a month ago after some clients said that they preferred using Venmo compared to using their card to swipe. Venmo is simple, safe, and fun. Customers will feel secured and happy not having to share their credit or debit card information with online shops.
Besides, it’s a great way to deploy limited sales at a storefront where there’s no need for a pricey POS system. According to Tyler Browne - the owner of California - based To the Cloud Vapor Store, whereas Venmo only takes about 1% of his store’s sales, it’s a significant tool for in-store purchases.
He added “We are mainly an eCommerce store, but our SEO brings us lots of local clients who will show up at our office” and “Instead of turning them away or setting an expensive POS for a small proportion of transitions per month, we just choose Venmo.”
The most appealing benefits for both clients and businesses is that users can quickly transfer money to their back. Venmo’s business version offers immediate transfer, enabling businesses to get money or issue payments on the same day.
Sarah Zurell - the co-founder and executive vice president of peer-to-peer parking business Pavemint claimed many customers of her company decided to use Venmo as it is fast, easy, and safe.
Additionally, Venmo’s speed is beneficial for business owners who have to pay freelancers after their project is finished. According to Zack Bates - the CEO of Private Club Marketing, his business has set up a network of freelance photographers and videographers across the country who work with each other on projects to promote the clubs of private members. He revealed that the majority of these freelancers want to receive their salaries as fast as possible, so he shifted from using PayPal to using Venmo.
Bates also stated that Venmo provided a quick solution to fulfill the freelancers’ requests and have projects completed fast.
Connection to customers
The like and comment features of Venmo has given businesses the chance to connect with customers on another level. You can break down barriers, simulate customers to raise questions, and interact with your business via a social-inclined platform.
Panda stated, “The features Venmo offers are great” and “When we can interact with our customers, they feel more convenient asking us questions and are more likely to buy again.”
According to Josh Criscoe, the head communications for Venmo, using Venmo payments, enables a retailer to welcome Venmo’s millions of greatly engaged clients who like sharing their buying activity on Venmo’s feed, an effective recommendation tool to other Venmo users.
Venmo is a business owned by another larger one - PayPal, so it has security support from a major company. Whereas a few users are conscious of linking their bank account details to an app, Browne claimed that the majority of his long-term customers have no trouble using it.
He also revealed “Venmo’s younger customers pop up at their door and already install the Venmo app. However, when they tell older clients about it and they seem to be fairly skeptical, none of them download the app and do not want to provide their bank account information to an app.”
In spite of doubt from several customers, Venmo is a good, secure choice for both individuals and businesses. Criscoe stated that it builds an encryption system to protect users.
Specifically, Venmo has the advantage of about 20 years of experience in payments security and fraud avoidance. Personal and financial information is encrypted and protected on the secure server to avoid unauthorized transactions.
Should you use Venmo for your business?
Before you register for a PayPal or Venmo account, you need to consider the costs and advantages. The cost of allowing digital transactions via digital wallet apps is often in a similar range to the cost of credit card transactions, but it also requires fee regarding time and human resources (for fulfillment and processing management).
Some business owners say that unless they are losing money by not allowing a payment option, it’s not worth the problem. Nevertheless, you should not assume. Conduct several pieces of research on your existing customer base to see whether they’d like to pay with digital wallets or use cash, credit, or debit cards.
It’s also crucial to compare with other types of payment methods:
- PayPal: Whereas PayPal owns Venmo, they have their own platform for merchants. The PayPal business app enables you to make invoices, store customer details, and keep track of transactions on-the-go. If you want more features rather than collecting payments, PayPal provides more choices.
- Square: If you have to gather in-person payments, Square provides more options, which include the mobile credit card reader. You’ll handle customers, book appointments, and pay attention to inventory with this app.
- Stripe: If you have a developer who is able to personalize your app, Stripe is a great option for online businesses that need a cheap payment processor. Like Venmo, it provides many features besides just accumulating payments.
Through the Venmo for Business review, we expect you to have a deeper understanding of the app and decide whether to accept Venmo payments. Consider the app’s pros and cons before making any decision.
Leave your questions (if any) in the comments section; we’ll reply to answer you. Thank you for reading.