Home Manage MoneyApp/Softwares Venmo vs. PayPal: Which One Should You Choose? [2021]

Venmo vs. PayPal: Which One Should You Choose? [2021]

by Team Finance Meaning
Venmo vs. PayPal

Are you confused while choosing an online payment platform for making your lifestyle easy? If so, you don’t have to worry anymore. Today, we’ve brought a detailed comparison of Venmo vs. PayPal to help you select one that fits your needs.

Choosing a payment gateway is essential these days. After all, you don’t have to visit the bank for every little thing. You can do this with your mobile phone on the go. But, the problem is, it’s challenging to find a platform with no flaws in transactions and managing funds.

One more hurdle you might face when deciding on your baking option is several platforms like PayPal and Venmo provide such services. So, it becomes more troublesome to consider which one is best and which one you can rely on. 

Moreover, do you know, PayPal has many subsidiaries like Xoom, Venmo, Paydiant, Braintree, and so on? As they let you send and receive money electronically, how can a person choose one payment platform?

Please take a deep breath, because below we’re going to compare PayPal and its famous subsidiary Venmo. In the end, you’ll be able to choose one of these two choices. Let’s start with the overview.

Venmo Vs. PayPal: Overview

PayPal is a renowned name; it’s an online payment system. With PayPal, you can send or receive money anywhere in the world. Moreover, you don’t have to worry about security because PayPal is a secure and fast payment gateway.

Venmo is a subsidiary of PayPal. In simple words, PayPal is Venmo’s parent company. Like PayPal, Venmo is also a safe payment gateway that allows users to send or receive money only in the U.S.

Venmo

Venmo is a digital wallet that has more than 70 billion users. It is a free service; you don’t have to pay a penny for registration. You have to link your bank account, credit, or debit card to Venmo, and that’s it. After that, you can send or receive money through the Venmo app.

PayPal

PayPal is a leading payment service platform all around the world. PayPal offers many services, the same as banks, like providing loans and business products. According to Statista, it has more than 403 million active users.

You can also apply for PayPal MasterCard, which is an excellent option for shopping online. According to a survey, 14% of people used PayPal as payment during online shopping.

Differences

Here comes the crucial part, is there any difference between PayPal and Venmo? Or are they the same? Let’s discuss the differences of each platform through some points.

Venmo

  • Venmo is a digital wallet, but it does not work outside the U.S.
  • Venmo app has a social feed where you can like, comment, and share stickers.
  • You’ve to pay an extra fee if you want to send money in an hour.
  • Only the person who lives in the U.S. and has a bank account there can use Venmo.
  • The weekly rolling limit of Venmo is $4,999.99 for a verified account.
  • You can only send $3000 at a time.
  • It is not a good option to buy goods online because only a few brands support Venmo as a payment method.

PayPal

  • PayPal is a secure payment gateway, and anyone can use it worldwide.
  • The PayPal app does not have any social feed.
  • If you’re a merchant, you can create a PayPal business account.
  • Other than business accounts, PayPal also offers personal accounts for individuals.
  • The transaction limit of PayPal is $60,000 if you have a verified PayPal account.
  • In a single transaction, you can only send $10,000.
  • PayPal is a good option if you want to buy goods online.

Service Cost

Every platform charges its users for providing services. The same is the case with PayPal and Venmo; they also have some fees. Let’s come to the fee structure of both platforms.

Venmo

Venmo is a free service; you don’t have to pay for registration and the app itself. Yet, it does not mean it is entirely free.

You can transfer money from your linked U.S. bank account and debit card without any fee. But if you want to send money through a credit card, you’ve to pay a 3% fee.

PayPal

Similar to Venmo, PayPal offers free transactions with the linked bank account. If you want to send money through a credit or debit card, be ready for a 2.9% and 30 cents fee.

However, PayPal offers a different fee rate for merchants who want to collect money worldwide for goods and services. This feature makes PayPal the choice of most business owners.

Safety to Use

Safety is the most crucial concern when using an internet banking service. So, what do you think, which one between PayPal and Venmo is safer to use? Now, it’s time to figure out which one is more secure and why.

Venmo

Venmo uses Bank-level-encryption which means you don’t have to worry about your data. Other than that, you can also add MFA (Multi-Factor Authentication).

However, there’s one problem if you don’t set the payment activity privacy setting to private. The transaction details (except the payment amount) will show on the public feed whenever you send money to someone.

PayPal

PayPal comes in the list of best and secure payment gateway. You can send money to anyone or receive it securely. Your data will be protected even if you make transactions. The person will not receive any of your personal information. So, you can send money to anyone.

Advantages

Following are the advantages as a user you’ll get if you used PayPal or Venmo.

Venmo

  • It is an excellent option to send money if you’re living in the U.S.
  • You can install the Venmo app on your mobile phone and send or receive money.
  • The app offers contact sync features.
  • Venmo also offers master debit cards to its users.
  • You can connect your U.S. bank account and credit, debit card with Venmo.
  • Several brands used Venmo as a payment method.
  • Venmo app also has a social feed to connect with friends.
  • It is free if you’re sending money through a linked bank account or debit card.

PayPal

  • With PayPal, you can send money all around the world.
  • You can use PayPal services through its app.
  • PayPal offers a business account to process payments related to business.
  • You can send up to $10,000 in one transaction.
  • You can apply for a PayPal Master credit card.
  • With PayPal, you don’t have to worry about the safety of data.
  • There are a lot of online stores that accept PayPal as a payment option.
  • With PayPal Credit, you can buy anything from stores like eBay, Adidas, Overstock, Samsung, Apple, etc.

Drawbacks

Although PayPal and Venmo offer a lot of benefits to their users, there are still some downsides. Let’s also discuss them to warn you before you go for any of them. 

Venmo

  • The transaction limit of Venmo is not as good as PayPal.
  • Through social feeds, your friends can see the details of the transaction.
  • You can’t send or receive money outside of the U.S.
  • If you want to send money in an hour, you’ve to pay an extra fee of about 1.5%.
  • Venmo is not a good option for business transactions.

PayPal

  • PayPal is expensive as compared to many other payment services.
  • Your account will be frozen if any suspicious activity with the account is noticed.

Is PayPal Faster Than Venmo

PayPal offers excellent services to its users as compared to Venmo. Anyone can use PayPal and anywhere. Venmo, however, does not work outside of the United States. It does not mean that PayPal is a clear winner.

There is a point where Venmo shines, which is the time of transaction. A PayPal user can send money to anyone globally, but withdrawal speed is 3 to 5 days, and Venmo withdrawal speed is 1 to 3 days.

How to Send Money From PayPal to Venmo?

Unfortunately, there is no direct way to send money from PayPal to Venmo. However, if you want, you can connect your PayPal MasterCard to your Venmo account. You can also link the same bank account you own to both PayPal and Venmo.

How to Transfer Money From Venmo to PayPal?

You’ve to link the same bank account to both PayPal and Venmo to transfer money. This is the only most convenient way to transfer money between the two platforms.

Frequently Asked Questions (FAQs)

This section of the article Venmo vs. PayPal will answer a few FAQs. It will let you know about the issues people are already tensed about. 

Is Venmo safer than PayPal?

Both Venmo and PayPal are safe and protect your data. However, if you’re thinking of using Venmo for business needs, then it is not secure. At the same time, PayPal is safe to use for anything, whether you want to use it for business purposes or as an individual.

Why shouldn’t you use Venmo?

No doubt, Venmo is an excellent peer-to-peer payment system. Still, it is not secure to use Venmo for business purposes. However, if you want to send money to a friend, family member, or familiar person, go for Venmo.

Is Venmo protected like PayPal?

If it comes to protecting personal data, then both PayPal and Venmo work well. But if we talk about buyer and seller protection in case a transaction does not work, then PayPal is best. It provides refunds for buyers and sellers.

At the same time, Venmo does not offer any protection for buyers and sellers. It means you can’t get anything if the transaction does not work.

Is it safe to use Venmo?

Yes, Venmo is entirely safe to use if you’re receiving or sending money to a familiar person. But if you want to send money to an unknown person, then it is unsafe.

Has Venmo been hacked?

Yes, your Venmo account can be hacked. There are many users whose bank account has been hacked in the past. So it is necessary to follow these tips to secure a Venmo account.

  • Don’t send money to strangers with your Venmo account.
  • Don’t use public wifi and log out from your device after using the app.
  • Use complicated passwords and enable pin code and multi-factor verification.

Final Remarks: Venmo Vs. PayPal

Well! That’s all about the comparison of Venmo vs. PayPal. Both the payment platforms work fine and offer excellent services. But if you’re searching for a secure payment option that allows users to send money to others worldwide, then PayPal is best.

However, Venmo is best to send money to family, friends, or people within the U.S. So, which platform are you using and why? Let us know in the comment section.

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