Venmo vs. PayPal

Venmo vs. PayPal: Accessibility

PayPal and Venmo both have their own free apps for iOS and Android, which is where most users will go to use each service. They both also have browser-based desktop versions. However, Venmo payments can only be initiated with the mobile app, whereas PayPal payments can be made through the app or the website.

PayPal can also be used as payment with a wide variety of online merchants, and even for QR code purchases in-store. Though Venmo is working to build up this merchant transaction capability among more retailers, its reach is currently very limited compared to PayPal’s very expansive footprint.

Venmo vs. PayPal: Sending Money

The process to send money to someone is fairly similar across the two apps. Both offer the ability to sync your contacts to the app, enabling it to search for any associated PayPal or Venmo accounts held by your friends and family. But even if the app doesn’t surface the contact you’re looking for, you can send money using their username, email address, or mobile number.

After choosing the recipient and the amount, both PayPal and Venmo will ask you what payment method you’d like to use. If you have a positive balance with either service, you can use those funds for your payment. Otherwise, funds will be drawn from the bank account, debit card, or credit card you identify as your desired payment method for this transaction.

Once you hit "send" on your payment, the amount will hit the user’s PayPal or Venmo balance within a couple of minutes, often even seconds. With both apps, you’ll want to make doubly sure you’re sending money to the right contact, since the companies won’t refund your money if you send it to the wrong person.

Venmo vs. PayPal: Requesting Money

It‘s also possible with both PayPal and Venmo to receive funds from someone. With Venmo, you can request funds from another person, creating a reminder for someone to pay you, or provide them with easy access to your contact info and the proper amount of the requested payment. With PayPal, you can securely request funds and customize a message before sending. Requests can only be made to other PayPal users.

Once the person receiving your request for money acts on it by making a payment, the funds will hit your PayPal or Venmo balance almost instantaneously. From there, you can use those funds to make a subsequent payment (or, with PayPal, a merchant purchase), keep them sitting in your account for later use, or transfer them out to your linked bank account.

If you opt to transfer funds to your bank, both PayPal and Venmo give you the further option of how quickly to complete the transfer. Without a fee, you can choose a transfer that will generally be completed the following day, but it can take up to two to three days for either app. If you’re in a rush, both Venmo and PayPal allow you to choose an instant transfer for a small fee.

Venmo vs. PayPal: Fees

Fees for the two services are fairly similar. Both offer free payments from linked bank accounts, and both charge about 3% for payments from a credit card. Where they differ slightly is that Venmo extends its no-fee option to payments made from debit cards, while PayPal only allows free payments directly from a bank account. For debit and credit card payments, PayPal’s fee is technically 2.9% plus a fixed fee. See more about Venmo's and PayPal's fees on their website.

One exception to the fee on payments made with a credit card is on payments made via American Express. Through a very new development, American Express is offering free payments through both PayPal and Venmo, though the payment has to be initiated through the American Express app instead of using the PayPal or Venmo apps. But doing so enables users to pay with a credit card and avoid the roughly 3% fee on that transaction.

How quickly you want to transfer accumulated money from your PayPal or Venmo balance to your bank account also has free options on both platforms. Both Venmo and PayPal allow you to choose a standard transfer speed of one to three days for free, or to upgrade your transfer to take place within seconds for a fee of 1.75% of the money transferred. Both services cap the transfer fee at $25 and stipulate a minimum charge of 25 cents.

When using PayPal as a merchant collecting payments from customers, PayPal offers a number of different pricing options. Meanwhile, Venmo is not geared toward merchant business transactions, and it has a transaction limit if it sees users are treating a personal account as a business account.

Venmo vs. PayPal: Limits

For those wanting to make very large transfers, PayPal offers a strong advantage. Single payments are generally allowed up to $10,000 each, with a total cap of $60,000. That’s significantly higher than Venmo’s limit of $6,999.99 per seven-day rolling period. On top of lower limits, Venmo also requires an identity verification step to access these limits. Until then, the maximum transaction amount is capped at $299.99.

Venmo vs. PayPal: Additional Features

As you can see, the two services present fairly similarly on basic features and fee structures. But there are a few areas in which the two apps differ markedly. For instance, with its strong focus on transactions between people who know each other personally, Venmo hosts a social feed of transactions that have taken place among people you know, as well as those of strangers, if you opt to view the public feed.  

A scroll through the feed of transactions by your Venmo friends will show you who paid who, and with whatever note they shared. The only thing missing is the amount. The feed also supports emojis, which are almost more common than text in the Venmo social feed. When you make your own transactions in the app, sharing them publicly is the default, but you can change this to viewable only by your Venmo friends or only by the recipient, either globally or on a transaction-by-transaction basis.

Where PayPal stands out against Venmo is in its ability to be used by merchant sellers who are accepting payments, as well as shoppers and buyers at online and physical retailers.

PayPal also offers international transactions. Covering more than 200 countries and transacting in about 25 different currencies, PayPal is the app of choice for those who want to pay or accept funds from those outside the U.S. In contrast, Venmo can only be used for U.S. exchanges. 

Lastly, both Venmo and PayPal offer their own credit and debit cards, although Venmo’s offering in this area is nascent. By acquiring a debit or credit card, payments to anyone accepting that card type can be charged directly to your PayPal or Venmo account. 

Venmo vs. PayPal: Business Features

Further cementing its reputation as the digital payments app of choice for merchants, PayPal offers a plethora of small business tools that are entirely absent in Venmo’s more person-to-person focused business model.

For instance, merchants who establish a PayPal Business account can use the service to essentially set up the financial transaction side of selling items online, making it easy to accept credit and debit card payments from all over the world. In exchange for this capability, merchants agree to a small percentage fee being subtracted on each transaction.

But PayPal’s support for small businesses goes far beyond accepting payments. PayPal Business also offers help with invoicing, product shipping, and marketing insights. Some services are included in the basic business package, while others are available to those with a PayPal Payments Pro account, which carries a monthly maintenance fee.

Growing businesses looking to scale can also benefit from PayPal’s provision of working capital and business loans.

Venmo vs. PayPal: Reviews

Both the Venmo and PayPal apps receive similarly favorable third-party customer reviews. Reviewers cite their ease of use, design, and ability to make payments and requests with just a few easy clicks.

How We Evaluated Venmo vs. PayPal

To help you understand when each of the two digital payment apps makes the most sense, we delved into PayPal’s and Venmo’s terms on features, payment transaction fees, bank transfer fees, transaction limits, and business/merchant offerings. By laying out a head-to-head comparison on these aspects, it should be easy to see which app will best serve your different needs, or possibly conclude that the best option is to have an account with each.