You can do nearly everything from your mobile phone or computer nowadays, including sending or requesting money. Two of the most popular platforms for moving money around are PayPal and its subsidiary, Venmo. Both are payment systems that let you electronically send and receive funds.
- What Is Venmo and How Does It Work?
- What Is Paypal?
- Is Venmo the Same as PayPal?
- Venmo vs. Paypal: Head to Head
- Venmo vs. Paypal: Which Is Best?
What Is Venmo and How Does It Work?
Venmo is a peer-to-peer payment app that lets you send and receive money from friends. You start by setting up an account using a phone number that receives texts. Once your account is set up, you’ll link a bank account, credit card or debit card as your funding source. You can then request money from friends or send funds by transferring cash from your choice of linked accounts or your Venmo balance.
Is Venmo Safe To Use?
All Venmo transactions are encrypted for security, but as with all cash apps, be cautious about who you’re sending money to and why. Venmo is designed as a way for friends to send and receive money. If the person you’re considering transferring funds to is someone you don’t know well or trust, consider using an alternative method of payment like a money order or credit card.
How Do I Get My Money Out of Venmo?
There are a couple of ways to cash out your Venmo balance:
- ATM withdrawal using the Venmo card
- Bank transfer to one of your linked accounts
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What Is Paypal?
PayPal lets you send money, accept payments and make payments online, regardless of whether the party is a personal friend or not. You’ll need to set up an account using an email address, which will serve as your payment ID. If you plan on making payments or sending money, you’ll need to register a credit card or bank account.
Is Venmo the Same as PayPal?
Although PayPal owns Venmo, the two payment services operate independently and have different missions. The main difference is whether you’re sharing money with someone you know or not. Venmo is intended for sending and requesting money between friends. PayPal has a wider reach, letting you receive payments from customers, pay for goods and services or send and receive money between friends and family.
Can I Use PayPal To Pay on Venmo?
You can’t directly send PayPal funds to Venmo. Instead, you’ll have to get creative and transfer PayPal funds to a bank account linked to Venmo and then withdraw the funds in the account from Venmo.
Can I Send Money From Venmo to a PayPal Account?
Likewise, you can’t send money directly from Venmo to a PayPal account, but you can make payments using Venmo at merchants that accept PayPal. Use your mobile browser to tap on the PayPal button. It will take you to checkout using your Venmo account if the merchant enabled the feature.
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Venmo vs. PayPal: Head to Head
Venmo and PayPal are both great tools when you need to send and receive money. GOBankingRates weighed their features to find how they differ:
Venmo vs. PayPal Comparison
|Payment/transfer methods||Venmo funds; credit card, debit card and bank transfers||PayPal funds; credit card, debit card and bank transfers|
|Fees for sending money using bank transfer or your account balance||Free||Free|
|Credit card transaction fees||3% fee||2.9% fee plus $0.30 per transaction|
|Debit card transaction fees||Free||2.9% fee plus $0.30 per transaction|
|Transaction limits||$299.99 weekly transaction limit unless you provide further personal information||No weekly transaction limits for verified accounts, though single transactions might be capped at $10,000|
|Bank account transfer times||By the next business day||By the next business day|
|ATM withdrawal fees||Free MoneyPass network withdrawals and $2.50 for out-of-network withdrawals||Free MoneyPass network withdrawals and $2.50 for international and out-of-network withdrawals|
|Cash reload on card||No||Yes|
|Security||Data encryption||Data encryption|
Here’s a closer look at how the two measure up:
Both companies have strong security features, including:
- Data encryption
- Fraud monitoring
- Seller and buyer protections
Even with these security protections, users should still be on the lookout for scams. Some Venmo users received a fraudulent text about an upcoming charge with instructions on how to cancel it, which asked the user to verify personal information. PayPal users have received similar phishing texts and emails from fraudsters.
Both companies offer users business and seller accounts, but PayPal is much more widely accepted than Venmo. PayPal is accepted in more than 200 countries worldwide while Venmo is only available for U.S. transactions. PayPal also lets you send and accept foreign currencies, which gives small businesses the chance to expand their customer reach.
Venmo and PayPal have similar features, but the companies differ when it comes to transfer limits. If the amount of money that moves through your account is a big factor, PayPal might be the best choice. Venmo has a $299.99 weekly transaction limit unless you provide further personal information. Verified PayPal account holders have no such transaction limits, although single transactions might be capped at $10,000.
Again, PayPal and Venmo are similar when it comes to fees. Neither charges a fee for receiving money from friends and family. ATM withdrawals using your PayPal debit card or Venmo card are both $2.50 unless you use the free MoneyLink network cash machines. There’s no charge for sending money using your PayPal or Venmo balance or a bank transfer.
The difference lies in your debit or credit card transactions. Venmo debit card transactions are free. Paypal charges $0.30 per transaction plus a 2.9% fee for debit and credit card transactions. Venmo charges a flat-rate fee of 3% for credit card transactions.
PayPal and Venmo are close when it comes to how long it takes to transfer money. Both promise the funds will be available the next day. Both also offer instant transfers to an eligible debit card or bank account. The funds will arrive in 30 minutes or less, but you’ll have to pay a 1% fee (for a maximum of $10) for the faster service.
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Venmo vs Paypal: Which Is Best?
If you’re looking for a simple service that lets you send and receive cash between family and friends every so often, go with Venmo. It’s designed as a social money app for sharing funds with people you trust.
But if you’d like more flexibility, PayPal is best. You’ll be able to send money to and receive money from businesses and individuals in nearly any country, even if you don’t have a personal relationship with them. Just remember to vet people thoroughly and proceed with caution when sending money.
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