Venmo, the popular peer-to-peer payment app owned by PayPal, announced recently that it would be making some changes that may affect many of its 70 million users – most notably, an increase in their fees.
As of August 2021, Venmo is now charging 1.5% of the amount being sent – capped at a maximum of $15 – when you utilize their instant transfer service.
While this may not seem like much, if you use the app frequently or for higher dollar amounts, this fee increase can quickly add up. Venmo’s standard transfer process remains free, but the transferred funds may take up to three business days to appear in the desired account.
Additionally, according to an email sent out by Venmo – “users who receive payments that are identified by senders as for goods and services will be charged a seller transaction fee of 1.9% + $0.10.” Venmo offers business accounts which already charge this transaction fee, but apparently, this new policy is intended to crack down on small businesses that may have been accepting Venmo’s personal payments from customers. It’s unclear how they intend on enforcing this policy.
Why you may want to start using Zelle® instead
There are a number of peer-to-peer payment apps available, but if these Venmo changes impact you, you may want to look into Zelle.
Unlike Venmo, Zelle moves money directly between linked bank accounts (with no middle man), typically within minutes, and doesn’t charge any fees for using its service.
Valley customers, for instance, can use Zelle through their mobile banking app, providing a safe and easy payment option. Once enrolled, sending money is as easy as adding a trusted recipient’s email address or US mobile phone number, entering the dollar amount you want to transfer, and hitting “Send.” And it doesn’t matter where your recipient banks. You can also easily request payment via Zelle.
So if you’re concerned about the fee increases using Venmo, you may want to check with your bank to see if Zelle is a better option for you.