What is Venmo and how does it work?

Many people think about payments in a simple manner. Money moves from their bank account to someone else’s, and valuable goods or services are received in exchange. But behind every payment, there’s a story, there are people, and there’s often a desire to achieve more than a mere money swap.

This is where Venmo comes in. We're going to explain what exactly Venmo is, how to send and request money with it, the Venmo balance and debit card, how Venmo works, its safety and fees, along with a cheap and international option.

What is Venmo?

Venmo is a service that enables you to make payments and money requests to friends¹. Basically, Venmo offers a more social approach to paying those you owe by combining regular money transfer features with social media elements.

With Venmo, you can send money from your bank account to other users or receive funds from them into your bank account. It also helps you use your contact information such as phone numbers, email addresses and even Facebook friend lists to issue payments.

Additionally, Venmo allows you to easily split the cost of anything among friends and family, be it a dinner bill, the fare for activities like theme park rides, rent, road trips, etc. Venmo is regulated by the Consumer Financial Protection Bureau (CFPB)².

Sending and requesting money with Venmo

To send or request for money using Venmo, go to the home screen and look for the Pay or Request button. It's usually labelled “Pay or Request”, or has the symbol of a pencil and square. Proceed to add the friends you’d like to pay or charge, specify the amount and leave a note³.

Once you’re done with these steps, tap “Pay” to send money, or “Request” to charge someone. Remember that you don’t need to have money in your Venmo account to pay someone. It can come from your specified external payment method such as a bank card.

What is a Venmo balance?

The Venmo balance is simply the money in your Venmo account that you received from friends, family, etc. and haven’t spent or transferred to a bank account. You can see this balance on your profile page⁴.

Within the Venmo app, you can see your balance when you scroll to the top of your personal transactions on the right of your friends feed or when you tap on your profile photo ― in the upper left corner.

Once you verify your identity, you’ll be able to use your Venmo balance to make payments to friends. This money can also be used at the checkout of apps and mobile websites that are authorized to receive payments through Venmo.

Keep in mind that the Venmo balance can only be used if it’s enough to cover the payment. Otherwise, Venmo will resort to your other specified payment methods ― like a debit or credit card.

Cross-balance made easy with Wise 🚀

Venmo debit card

The Venmo debit card serves as a physical method of making payments straight off your Venmo balance, powered by MasterCard. It enables you to take your Venmo balance with you, pay at your favorite stores, bars, restaurants, etc. You can also earn cashbacks on your payments.

Venmo allows you to track your card’s activity from within the app and even disable it if you lose it. You can set up the card to be reloaded automatically too, with Venmo sourcing the remainder of the money for a payment from your preferred funding method, if your balance isn’t enough.

The Venmo debit card can also be used for contactless payments, as it doesn’t require swiping or inserting. You can even use it to make cash withdrawals from ATMs, and you won’t be charged when using a MoneyPass ATM in the US⁵.

How does Venmo work?

Venmo enables you to connect your bank account and move money back and forth so that it's where you want it when you want it. You can use it to receive payments and also make payments either with the money in your Venmo account, or from a funding source you’ve connected, like a debit card.

The app allows you to share the payments you make to friends, family or approved businesses with a comment, just like the way you make a typical social media post. Venmo is available in the US only.

How safe is Venmo?

Venmo offers a wide range of security and privacy features, from identity verification to disabling of cards and limiting visibility of payments.

Does Venmo charge any fees?

When it comes to money in your Venmo account being sent to another Venmo account or when you’re receiving money from a friend’s Venmo balance into your Venmo account, there are no charges. Venmo does have some fees for adding money to your account, sending money, running a business profile, etc.

However, a lot of this depends on the type of payment method, the mode of transfer or withdrawal, the use case for the card, and other factors. There are still plenty of cases within these different services where you still won’t be charged⁶.

A cheap and international alternative: meet Wise

For starters, Venmo is only available in the US, so when you need to make transactions across borders, you’ll have to consider other options like Wise.

You can also fund your transfers through different payment methods, such as ACH, wire transfers and bank cards. They use the mid-market rate and show upfront how much you’ll need to pay, this way there are no surprises like mark-ups or additional conversion fees.

Start saving on international payments

Venmo is a service in part due to its unique approach to payments such as making up the difference on your account balance by drawing from a connected funding source. The same goes for its social aspect, which can help people connect more and discover amazing products and services.

However, it's location and currency coverage are restricted to the US, so it's always an option to look at a far-reaching alternative like Wise.