The Complete Guide To Using Venmo For Business: Fees, Features, & How To Get Started
Have you ever verbed the word Venmo?
If so, you’re probably one of the young, tech-savvy, and socially-adept crowd who likes to try new things, and the cooler it is, the better. And what can be cooler than taking out your phone, bringing up your very own business QR code, and asking the other person to pay you by scanning the code with their Venmo app?
Yep, there’s a new way to use Venmo for businesses.
This QR code method isn’t the only way to take payments with Venmo, though; there’s been a couple of other ways to pay with Venmo for a while. But now that Venmo has introduced this new method, we’re going to take a look at all the Venmo payment methods, so you can decide if taking Venmo payments is right for your business.
Let’s get started.
Table of Contents
Can You Use Venmo For Business?
The main question we want to answer here is this: Can you use Venmo for business purposes? The short answer is that businesses can take Venmo payments in three ways: online, in-app, or in-person. To accept Venmo online or in-app, you’ll have to go through PayPal or use Braintree as your payment gateway. To accept Venmo in-person, just sign up for its new Business Profile service.
Using Venmo For Business: How To Accept Venmo Payments
Most people have at least heard of Venmo and know, vaguely, that it’s used to send small amounts of money to friends and family to split everyday small payments (lunch, a birthday present, rent, etc.). Until recently, Venmo had discouraged its users from paying businesses with Venmo. In fact, Venmo actively forbade it.
Recently, though, Venmo has made some changes. Maybe it was because Venmo was bought by Braintree, which, in turn, was bought by PayPal. Whether or not Venmo had always planned to do it, the company has now started to allow businesses to take direct payments through Venmo.
As a first step, Venmo started to allow two officially-sanctioned but round-about ways to add Venmo to a website’s checkout: either through PayPal Checkout or by using the Braintree payment gateway. Venmo recently added a feature called Business Profiles to allow some businesses to take payments directly via a QR code from the Venmo app for in-person payments. To use any of these services, though, you have to be a US resident.
The way a business can accept payments through each of these methods is a little different, however. Keep reading for details.
Adding Venmo Payments To A Website Or App
There are two ways to add Venmo to a website or an app: PayPal or Braintree.
Adding Venmo Payments Through Braintree
Braintree Payment Solutions is a merchant services provider with a particular focus on online and mobile payments. Its offerings work pretty seamlessly with PayPal’s. If you sign up with Braintree, you’ll get a traditional merchant account. Braintree supports a vast array of payment types, both in apps and on the web. As a result, it will take a developer to implement Braintree payments and get the most out of the Braintree platform.
Braintree will also allow customers to save their payment information for subscriptions and recurring billing, including Venmo payments.
Accepting Venmo Payments Through PayPal Checkout
Instead of going through Braintree, you can also implement Venmo through PayPal Checkout. Checkout is PayPal’s recommended option if you add payments to an eCommerce shopping cart or offer PayPal as a supplemental option to another credit card processor. Keep in mind that PayPal is a third-party payment processor. As such, it comes with an inherent risk of account instability — potential holds on funds or even an account freeze if PayPal’s system flags any suspicious behavior.
If you go through PayPal, once your customer is ready to pay, they’ll be directed to a secure payments page or popup. There they will see a Venmo button to start the payment process.
Finally, it’s important to note that because PayPal owns Venmo, PayPal’s Seller Protection policy applies to Venmo transactions. Venmo has its own protection policy for buyers, which is the same as PayPal’s in many ways, though Venmo admits there are some differences. Venmo lays out its terms and conditions for merchants in the User Agreement if you’d like to take a closer look.
Accepting Venmo Payments In-Person
Venmo recently started a new service called Business Profiles. You can set up a business profile as long as you first have a personal Venmo account.
You might be wondering if Venmo has a card reader similar to Square’s for in-person payments. The answer is “no.” It has something arguably better: a QR code unique to your business. All you have to do to accept payments in-person is to ask your customer to use their Venmo app to scan the code. Business Profiles also allows you to take in-app payments too without using the QR code.
With Business Profiles, you can track your business transactions separately from your personal ones by switching between your personal and business profiles. (You’ll still have just one login.) You’ll also get some sales/customer analytics with your business profile sales. Lastly, because Venmo is social in nature, you’ll get free advertising when others see people are using your services/buying from you.
The above is basically all the information you get when you look at Venmo’s main pages. However, we found some extra information in Venmo’s User Agreement and other fees pages.
- Your Business Profile account is based on your personal account, and you must reside in the US to get either.
- Business Profiles are intended for sole proprietorships (e.g., freelancers). Partnerships, LLCs, corporations, and other types of entities have to apply for a business account. Venmo is a little vague, so it might be possible that it will let you use a Business Profile on a case-by-case basis since many single-employee businesses (e.g., wedding photographers, artists who sell at local craft fairs) are incorporated as LLCs. Contact Venmo to make sure.
- Venmo may restrict the use of your business profile if “the activity through your business profile reaches certain thresholds.” Venmo is vague about what that threshold might be.
- The company might ask you for more information about your business for tax reporting, resolving disputes, or other reasons.
- Venmo has the sole right to suspend or terminate your account for any reason or no reason.
- Your personal Venmo Debit Card transactions cannot be funded by money in your business account.
- You can’t set up recurring billing through Business Profiles (but recurring billing is possible by going through PayPal Checkout or Braintree).
- When making a sale through a Business Profile, Venmo will not calculate sales or other applicable taxes, so the merchant is solely responsible for taking care of those.
Venmo doesn’t specify any payment limits or bank transfer limits that are specifically applicable to the Business Profile. However, it does have generic limits for authorized merchants:
- Payment/spending limits:
- $6,999.99 per week
- $2,999.99 per transaction
- Bank transfer limits for Venmo accounts (no specific mention for business accounts):
- Up to $19.999.99 per week
- Up to $2,999.99 per transaction
Venmo For Business Fees
The way Venmo charges for transactions is not uniform, mostly because it didn’t start as an app for businesses. When it did venture into that territory, it was through Venmo’s corporate owners.
Braintree’s standard pricing applies for transactions that go through Braintree instead of having specific Venmo business fees. Most merchants will pay 2.9% + $0.30 per transaction unless they’ve already negotiated special pricing. Venmo transactions are settled according to the same terms as Discover card transactions, but you can identify them in your dashboard by looking for the Venmo logo in the payment type.
For transactions that go through PayPal Checkout, you’ll pay the standard PayPal rates, which is 2.9% + $0.30 per transaction for most merchants. (Keep in mind that PayPal does have a micropayments option for merchants whose average transaction sizes are under $10.) PayPal treats Venmo transactions just like all other transactions — currently, they are not identifiable as Venmo transactions.
For Business Profile transactions, at this introductory stage, Venmo is offering Business Profiles at no charge. All you pay is 1.9% + $0.10 per transaction whenever someone pays you.
How To Make A Venmo For Business Account
When using Venmo for business, if you wish to implement Venmo through Braintree or PayPal Checkout, you’ll need a developer’s help. Setting up a Business Profile, however, is relatively easy.
With Braintree, you can build Venmo into your store’s app for iOS or Android or website as long as you use the SDKs with these or higher versions:
- iOS v4
- Android v2
Integrating Venmo into PayPal Checkout requires a developer and some code work. PayPal has upgraded its Checkout offering with “Smart” customizable payment buttons and contextual tools that will display multiple checkout options — PayPal, PayPal Credit, or Venmo — based on what it knows about a consumer. Currently, Venmo is only available on mobile devices, though that may change in the future. It’s also worth noting that PayPal Checkout doesn’t allow you to present Venmo as a stand-alone payment option. If you’d like this feature, you’ll need to go with Braintree instead.
Lastly, the easiest way to use Venmo for a small business is to create a Business Profile. All you have to do is tap on your profile picture on the upper left side of your app and then tap “Create a business profile.” After that, simply customize your profile by adding some information about your business and publish the profile. You’re all set to take payments. One thing to note, though: Venmo is rolling the service out very slowly, so not everyone will see the “Create a business profile” option just yet.
Should You Use Venmo For Business?
For most businesses, whether you should take payments through Venmo depends on your customer base. While Venmo is a popular app among the young and the tech-savvy, other segments of the population may not have heard of it much. Because integrating Venmo tends to require a developer’s help and since Venmo users more than likely also have Apple Pay or Google Pay on their phones, adding Venmo as a payment method might not be worth your trouble.
But if you’re a freelancer or have another type of single-employee business (dog walker, photographer, hairstylist) and if your customers tend to be the Venmo-using crowd, then it makes a lot of sense to set up a Venmo Business Profile. Given the social nature of Venmo, you might even get some free advertising from it.
So after reading this article, are you going to use Venmo for your business? If you’ve added it already, how do you like the service? Is it worth the time and effort? Leave us a note below!