PayPal Vs Venmo – What is the Difference?

PayPal Vs Venmo the Difference. PayPal is a big and oldest digital wallet payment system established in 1998. Venom is one of the newest digital wallets that has grown popular after its acquisition in 2013 as part of Braintree for $800 million. In this article, we will be discussing PayPal Vs Venmo: the difference. This will allow you to make the right choice whenever you want to make a payment.

What is Venom and How Does it Work?

By definition, Venmo is a payment app that is free to use and it allows users to send and receive funds from contacts or friends. It connects to a user’s bank account and also credit and debit cards. Venmo is owned by PayPal and it’s currently only available to users within the US.

Venmo is a mobile-first service that is designed largely for Small fund transfers with an inbuilt social aspect given the visibility of the transfer. It works perfectly well on iPhone and Android users. It is USING. Peer-to-peer market to enhance users’ quick share payments by attaching their bank accounts, and credit or debit cards to the service. There is a little fee attached for instant transfers to cards, bank transfer from the app is free there are no transaction fee charges.

However, Venmo has a simple model, it works like a social media platform. Users keep using the colloquial phrase “Venmo me” to ask for payment over the app. This has increased users of this app over the years as seen in 2018 over $19 billion in payments in the final quarter.

What is PayPal and How Does it Work?

PayPal is a strong and first payment service and digital Wallet that has grown to dominate the market for cash apps over the years. PayPal allows users to connect their bank accounts credit or debit cards to their accounts. With these, they can send money and receive payments on mobile devices.

Moreover, PayPal has expanded its services to offer more products and services to businesses and its clients. Services just like a bank, giving of loans and business products. Also, PayPal is an official payment provider for eBay. According to the report, PayPal dominates the fintech space, with over 60% market share among payment apps. And also has up to 267 million active users in 2019.

What’s the Difference?

PayPal and Venmo share a lot of similarities, they are both of the same company and they share a similar fee model and other formats. But there are still differences between these two let’s find out.

Security

security is a major factor one consider before choosing any payment system or cash app. Venmo has bank-grade security and encryption as a personal PIN code given to mobile users for transactions. PayPal security system is also encrypted using updated data encryption technology. Users receive confirmation alerts or emails to show that their transaction was successful. With these, the two payment systems have strong security.

Transfer Limits

Venmo gives a smaller transfer limit than PayPal. Venmo users are allowed to transfer up to $3,000 at a time compared to PayPal which is $10,000. However, the transfer limit is related to how the services are used. Venmo covers more day-to-day purchases and transfers while PayPal is meant for both transactions and bigger withdrawals or transfers.

Fees

In terms of fees and pricing structures, Venmo and PayPal have the same similarities. Both service apps are free to download and use. Charges for both payment systems is a 5.9% fee for credit and debit transfers. But PayPal adds an additional 30 cents for credit transfers and Venmo waives the fee for debit cards. But collecting 25 cents for instant transfer to debit.

Additionally, both services offer free transfers to Bank accounts from account balances. PayPal also has a separate set of merchant fees for companies using the service to process payments. For selling online, the fees for the US are 2.9% of the amount plus a fixed fee based on the currency used. For in-store transactions, you will pay a fixed rate of 2.7 as the transaction fee.

Withdrawals speed

Venmo and PayPal have almost the same withdrawal speed. PayPal withdrawal takes the speed of one to two business days while Venmo is one business day. Both are better when compared to their competitors.

Special Features

PayPal has expanded into areas that act as a bank more than a mere app. They perform services like extending credit, financing purchases, and giving customers a MasterCard designed for specific PayPal uses. PayPal is accepted generally by many stores around the world as a payment method for goods and services. While very few accept Venmo.

With Venmo, users can even interact with friends and family just like a social media platform like Twitter, or Facebook which is not available in PayPal.

In conclusion, both services perform similar functions, PayPal is designed for Small businesses or customers who make a lot of online or large purchases and transactions. Venmo is good for users who just want to send and receive small amounts with low fees on a daily basis. Whichever one favors your business you can opt for it.