Many individuals, including business owners out there, may already be familiar with Venmo from personal use. But do you know it’s also possible to utilize the Venmo app to collect payments from consumers if you set up a business profile? As a business owner, accepting Venmo gives your consumers a simple, contactless option to pay for their purchases. In addition, using Venmo’s social capabilities could aid in advertising your company. However, business owners planning to set up Venmo for a business account should be aware that the app is only available in the United States and that there may be weekly transaction limits and fees associated with their accounts.
If you’re thinking about using Venmo for your business but have some questions, read on to find out what it is, how to use it, what features are available for business profiles, and review
Venmo for Business
In July 2020, Venmo began testing out business profiles with a select group of users. Then, in February of that year (2021), Venmo revealed that 150,000 businesses were accepting the payment method and that it had decided to open up access to all qualified vendors. Freelancers and entrepreneurs of all sizes can now expand their customer base by accepting Venmo payments anywhere they do business, be it in person, online, or within their own apps.
A business’s profile image and a link to its website are just two of the many features available on Venmo to help promote its offerings and attract new consumers. However, there are fees involved with using the Venmo app to process your business and client payments.
How Venmo for Business Works.
Businesses still can’t use Venmo to accept payments for products or services through personal profiles. A new business profile must be applied for and approved before any business payments can be made or received. Once Venmo has verified your business, you will be able to receive payments digitally through the Venmo app or in-person using a Venmo QR code.
However, you will need to set up PayPal Checkout and include Venmo as a payment option if you want to accept payments through your business’s website or app during the checkout process. It’s possible that you’ll need to hire a developer and use the Braintree payment infrastructure to accept Venmo for this to happen.
Venmo is currently working on a solution to make business profiles accessible to all merchants. However, it seems like for the time being Venmo is targeting sellers that are either solo owners or businesses such as artists, crafters, photographers, dog walkers, hair stylists, and other similar professions. Nevertheless, it has a vast variety of business profile categories to choose from.
Can I Use Venmo for My Small Business?
Accepting payments for your small business through Venmo is easy once you set up a company profile. The requirement that the customer has a Venmo account represents the most significant possible barrier that could arise here. They need to have a mobile device with the Venmo app installed on it if they are going to make a purchase in person.
You can start payment in several different ways. As an example,
- Putting in a payment request to customers using the app.
- Request that the customer run a search for your account.
- Request that the client check your account by scanning a QR code.
What Happens if You Use Venmo for Business?
At this time, personal Venmo accounts should not be used for company business. According to the terms of service for the app, no one can utilize their own personal account for business purposes. Use of a personal account for business purposes can result in a “loss of transaction,” which means Venmo will confiscate the funds in question.
As of July, 2021, personal accounts started having the option to reveal when sending and receiving for business activities. So, if a customer pays you for a product or service, they can specify it on Venmo and you’ll be charged a transaction fee of 1.9% plus 10 cents.
Meanwhile, keep in mind that if Venmo finds out you are using your personal account to conduct business, they will reverse such business payments.
Venmo for Business Account
The Venmo business account makes it possible for companies of any kind to accept payments from their clients. It works wonderfully for shoppers, shopkeepers, and legitimate companies.
With a Venmo Business Profile, you may use your Venmo account to accept payments and make transactions. For commercial dealings, they also provide data on sales and customer analytics. In addition, the service includes a social component, which allows you to provide some free promotions for your company to the friends of your customers. These friends will see the transactions that your customers have made in their feed.
What You Need in Order to Create a Business Profile on Venmo
If you already have a personal Venmo account, you can switch to the business version of the app by selecting the “Business Profile” option from the main menu of the Venmo app. In the event that you don’t have a personal profile, you will be required to create one at the same time as you create your company profile.
If you already have a functioning Venmo account, you may initiate the process of setting up a Venmo business account by tapping on the profile photo associated with your personal account. After that, you need to look for and click on the “Create a company profile” link.
However, companies may skip the profile creation phase and go straight to profile editing and publication. If Venmo can locate the registered firm in the national database it uses, the procedure might be streamlined for enterprises as well.
Generally, Venmo will be able to verify your business registration information automatically. But, in some cases, you may be asked to produce further documentation. To be more specific, you may need to provide proof of your company’s EIN, physical location, and legal status.
Can I Open a Venmo Account for My Business?
With a Venmo Business Profile, you may segment your account for business and personal use. Using Venmo for business purposes is severely discouraged. Thus, you shouldn’t use Venmo frequently for this purpose unless you want to risk having your account closed or getting into trouble with the Internal Revenue Service (IRS). After establishing dual accounts, you’ll have the flexibility to switch between them as needed.
However, you must be a legal resident of the United States and already have a personal Venmo account before you can create a Venmo Business Profile. In addition to being a sole proprietor, adding a business profile to your personal Venmo account requires incorporation. On the other hand, for businesses like partnerships, LLCs, companies, etc. to use Venmo, they will need to create a separate Venmo business account.
Is Venmo Free for Business?
No, business accounts on Venmo are not free to create. However, if you are already paying for PayPal, the cost of Venmo transactions is included in your existing rate; however, Venmo itself does cost money. There is a cost associated with processing payments with Venmo, just like there is with every other digital transaction service.
Venmo for Business Fees
Venmo imposes fees on seller transactions in order to maintain and improve the quality of the service it offers, as well as to generate revenue for the development of business-oriented features like tax reporting, enhanced payment processing, and dispute resolution services. The Venmo fees for the business profiles are likewise structured in accordance with the applicable industry norms.
These business fees are what allow Venmo to expand its company and offer more features tailored to enterprises.
However, it’s also a good idea to contact your card issuer to learn whether or not there will be any additional fees associated with receiving funds from Venmo customers.
Creating a Venmo business profile is basically free for the first 30 days. This implies that you won’t have to pay a seller transaction fee on any money that comes into your business during the first 30 days that your profile is active.
Venmo for Business Account Fees
Even though there is no charge to create a Venmo business profile or to maintain it on a monthly basis, there are still fees associated with using Venmo for commerce that you should be aware of.
A seller’s fee equal to 1.9% of the payment plus $0.10 will be added to each transaction. Thus, if a customer gives your company 100 USD, you will only receive $98. This is due to the fact that 99 cents are deducted from 100 dollars plus 0.1 cents, for a total of $2. There will be no refunds for the fee. However, only purchases exceeding $1 are subject to a transaction fee.
To buy or sell bitcoin, you must pay a transaction fee that is proportional to the amount you intend to spend or sell. A minimum of fifty cents is required for transactions between one dollar and twenty-four dollars and ninety-nine cents.
Also, any purchases made with a credit card will include a 3% convenience fee for the buyer.
Therefore, whether or not you use Venmo for commercial or business purposes depends in part on whether or not you mind paying the seller fees it imposes.
How Do I Avoid Business Fees on Venmo?
A user has the ability to make some minor tweaks to their in-app transactions in order to avoid certain Venmo business fees. When sending money, customers can avoid the 3% fee that credit card companies charge by using their Venmo balance, bank account, or debit card. Users can also save themselves the 1.75 percent Instant Transfer fee when moving funds by instead requesting a regular electronic withdrawal. Although there is no fee for this service, it may take one to three business days for the funds to become available.
How to Set Up Venmo for Business
You have to be physically present in the United States and already have a personal Venmo account in order to create a Venmo business profile. When setting up your business profile, you will also have the option to create a personal account for yourself if you don’t already have one.
Both profiles will utilize the same login information from your primary Venmo account, and you may easily toggle between them by clicking your profile image in the top left corner.
How to Set Up Venmo For Business if Have A Personal Account
To set up Venmo for a business account, open the Venmo app and click on your profile photo in the upper left corner. From there, select the option to “Create a business profile.” This step is only necessary if you already have a personal Venmo account. You can also pick “Settings,” and then “Create Business Profile” by pressing the button that looks like three horizontal lines in the upper-right corner of the screen. After that, you will be given the opportunity to set up a business account by providing the required information.
To Set Up Venmo for Business if You Don’t Have a Venmo Account
If you want to set up Venmo for business without a personal account, the first step is to get the Venmo app on your mobile device. When the installation is complete, when requested, pick the “Business” option. Follow the prompts after clicking “Sign up” and “Get Started” to register an account and set a password. A verification code will be sent to your phone, after which you may enter it here. It starts with phone verification, then moves on to questions about your company.
Venmo Business Account Limits
Generally, there are a few Venmo business account limits that decide how much a user can send, receive or withdraw to your bank account.
The following limits apply to all purchases with a Venmo business account:
- $24,999.99 each and every week (or $2,499.99 without identity verification)
- $2,999.99 per transaction
The following are Venmo business account limits that apply to transferring money to your personal bank account:
- Up to $49,000.99 per week (or $999.99 without verification of identity)
- Instant transfers can go up to a maximum of $50,000 per transaction.
If you set up your Venmo business profile as a sole proprietor, your credit card limits will mirror those of your personal account.
Limits on payments and bank transfers, on the other hand, are the same for a company profile as they are for a personal profile, as described above.
What is the Difference Between Venmo Business and Personal?
When it comes to your company’s demands, a business account is essentially an upgraded version of a personal one. A business account’s social sharing options allow you to update your contacts on your business dealings as much as you can on a personal account.
Personal Venmo accounts are designed for individual use. Venmo users cannot do business transactions unless the seller has a business profile or marks the transaction as goods and services. However, you can not create a business profile without a personal account. This is why you will have to create one when you make your business profile.
Venmo for Business Review
Our hope is that after reading this review of Venmo, you will have enough information to make an informed decision about whether or not to begin accepting payments through the service. Think about the benefits and drawbacks of downloading the app before making a final choice.
Using Venmo to send money to others, split checks, or pay for goods and services is already commonplace. Further, it is gaining immense popularity as a means of electronic payment for commercial transactions.
How Venmo Compares With Paypal & Square
PayPal may own the popular Venmo app, but the company also offers its own service aimed at merchants. With the PayPal for Business app, you can send invoices, collect client data, and monitor payments wherever you go. PayPal has more features available than just accepting money.
| Venmo | PayPal | Square | |
| Customer Service | Phone, email, and messaging through the app | Phone, Email, Live Chat Support, PayPal Community | Phone, Email, Live Chat Support, Seller Community |
| Equipment | None is necessary | Online Processing, Billing, Marketplaces, Invoicing, and POS (Chip, Swipe, Tap) Systems | Stand, Terminal, and Register can be purchased, and the magstripe card reader is free of charge. The contactless and chip reader, however, costs $49. |
| Pricing Model | Flat-Rate | Flat-Rate | Flat rate |
| Good For | those who own small, mobile businesses or work independently and wish to accept Venmo payments | Merchants accepting PayPal; Retailers whose monthly sales are less than $100 | A mobile & small business with an average sale price of $100+ |
| Swipe Rate | 1.9% + $0.10 | 2.7% | 2.6% + 10¢ |
| Monthly Fee | $0 | No monthly fees but PayPal Payments Pro costs $30 a month to use. | No recurring costs |
| Comparative Online Pricing | 2.9% + $0.30 | 2.9% + 30¢ | 2.9% + 30¢ |
| Cost of a Transacting Keyed In | N/A | 3.5% + 15¢ | 3.5% + 15¢ |
| Deposit Time | Your Venmo balance is available instantly for in-person payments. | You can get at the money in your PayPal account right away, or you can have it deposited into your bank account right away for a 1% fee, or in as little as two business days for free. | If you provide your payment by 5 pm PT / 8 pm ET, you’ll have it the following business day. |
| Chargeback Fee | N/A | $20 | None |
Conclusion
If you own a business, you may give your customers an easy, contactless payment option by accepting Venmo. And using the social aspects of Venmo could help you get the word out about your company. Nonetheless, business owners should be aware that the Venmo app is now only available in the United States and that your account may be susceptible to weekly transaction limits and fees.
While not the ideal payment method, Venmo for business can be a convenient alternative. However, it is not without its restrictions. Several privacy-related controversies have arisen around Venmo. And, the service falls short in several ways compared to what a merchant account can offer.
No single solution will work for every business; instead, you must take into account the wants and demands of your clientele. Take into account whether or not the features and benefits of Venmo are worth the cost to you before you set up one for your business.
FAQs
Does Venmo guarantee the security of financial transactions?
Absolutely. Using industry-standard encryption, Venmo ensures that your financial information remains private and secure. Your account activity will be tracked and flagged if any suspicious behavior is detected by the encryption.
Can you change your business name on your Venmo account?
You cannot change your business name after completing the profile. Instead, you can contact Venmo’s support team if you need to rebrand your company.
Who is eligible to use Venmo for Business?
It is Venmo’s intention to provide seller profiles to all of its users. However, artists, crafters, photographers, dog walkers, hairstylists, and other one-person enterprises appear to be Venmo’s initial focus.
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