The Complete Guide To Using Venmo For Business: Fees, Features, & How To Get Started
Since its introduction in 2009, Venmo has amassed over 65 million subscribers in the US, making it one of the most popular and well-known peer-to-peer (P2P) payment services on the market. Although a convenient way to send and receive payments to and from individuals, the company was initially reluctant to allow its use for business transactions. That resistance has crumbled in recent years, and today it offers a Venmo For Business payment service that’s attracted over 2 million merchants so far.
Venmo For Business can be used online or in-person using QR codes and the Venmo smartphone app to make and accept payments. With interest in contactless payment methods soaring during the COVID-19 pandemic, it offers a simple way to process a payment without physically handling a customer’s credit card.
Of course, what merchants really want to avoid is paying all the processing fees that come with accepting credit cards and maintaining a merchant account. Venmo For Business doesn’t offer all that much help here, as your business transactions will still be subject to processing fees similar to what merchants pay to use a payment service provider (PSP) such as PayPal or Square. However, Venmo business fees are simple and predictable. You won’t have to worry about the hidden fees, long-term contracts, and cancellation penalties that often come with a merchant account. Venmo’s unique social features can also help boost sales or draw attention to particular products, as friends of your customers will be able to see their purchases on their Venmo accounts.
In this article, we’ll explain how you can use Venmo in your business, from showing you how to set up your business profile to discussing Venmo payment processing fees and transaction limits. We’ll show you how QR codes work and how to add a ‘Pay With Venmo’ option to your eCommerce website. Finally, we’ll discuss Venmo’s limitations and why it’s usually better as a secondary method of payment acceptance that works with your primary processing service rather than replacing it.
Table of Contents
Can You Use Venmo For Business?
Merchants who want to use Venmo as an alternative payment method will need to set up a Venmo Business Profile. Once that’s done, you’ll be able to accept payments using in-app purchases, a Pay With Venmo button on your website, or QR codes for in-person transactions.
What Are Venmo Business Profiles?
A Venmo Business Profile allows you to separate business and personal transactions within your Venmo account. Venmo added this service in response to merchants using their personal Venmo accounts to accept payments without paying any processing fees — which is a no-no.
Additionally, Venmo Business Profiles offer some sales and customer analytics information for your business transactions. The service also has a social function, providing you with some free advertising for your business to friends of your customers, who will see those transactions in their feed.
To create a Venmo Business Profile, you’ll need to be a US resident and have a Venmo personal account. You’ll also need to be incorporated as a sole proprietor to add a Business Profile to your personal Venmo account. Note that partnerships, LLCs, corporations, etc., can still use Venmo, but they’ll need to establish a separate Venmo business account.
Venmo Business Profile VS Personal Account
A Venmo Business Profile allows you to send and receive business and personal transactions from within the same account while keeping those two categories separate for record-keeping purposes. There are a few additional restrictions to keep in mind, however. Here’s a summary of the key differences between a Venmo Business Profile and a vanilla Venmo personal account:
- Your Venmo account may be suspended or terminated for any reason
- Your Venmo Business Profile is subject to certain monthly transaction limits (see below for details)
- Your personal Venmo Debit Card transactions cannot be funded by using money in your Venmo Business Profile
- You will be solely responsible for calculating and paying all applicable sales taxes
- Venmo Business Profiles do not support recurring billing (although this feature is available through the Braintree payment gateway or PayPal Checkout)
Venmo For Business Fees
Using Venmo For Business isn’t free, but its pricing structure is simple compared to a standard merchant account. Pricing is also fair and compares favorably with what you’d pay to use Square or PayPal. Online rates are identical, whereas Venmo’s in-person rates are significantly lower than Square’s current rate of 2.6% + $0.10 per transaction.
The following Venmo business fees and processing rates are all fully disclosed on the company’s website:
- No fee for setting up a Venmo Business Profile
- No monthly account fee
- 1.9% + $0.10 per transaction for purchases made using the Venmo app and a QR code
- 2.9% + $0.30 per transaction for purchases made online or in-app using the Braintree gateway or PayPal Checkout
Venmo is currently running a promotion where your transaction fees are waived for the first 30 days after setting up your Venmo Business Profile. While this is a great deal, be aware that it probably only applies to in-person QR code payments.
Venmo Business Profile Limits
Naturally, there are some Venmo business account limits on how much money you can send, receive, or transfer to your bank account. While the company doesn’t set limits that specifically apply to business use, the following general limitations apply:
Purchases have the following limits:
- $6,999.99 per week ($299 without identity verification)
- $2,999.99 per single transaction
Transfers to your personal bank account have the following limits:
- Up to $19,999.99 per week ($999.99 without identity verification)
- Up to $2,999.99 per single transfer
You’ll need to complete the identity verification process if you plan to use Venmo for business purposes. It’s simple and can be accomplished from the Venmo website.
How To Make A Venmo Business Profile
Creating a Venmo Business Profile for in-person transactions is about as simple as it gets. Just open the Venmo app on your smartphone or tablet, and follow these steps:
- Select the Venmo app’s main menu (☰)
- Choose the Business Profile option
- Follow the steps provided and enter the appropriate information about your business
That’s it! The entire process can be completed in just a few minutes, after which you can begin accepting payments from your customers.
Things will be a little more challenging for eCommerce users. In addition to setting up a Venmo Business Profile following the steps outlined above, you’ll need to integrate the “Pay With Venmo” option into your existing website or app, using either the Braintree gateway or PayPal Checkout. In addition to signing up for either a Braintree or PayPal account, you will most likely need a developer to help you integrate the appropriate code into your site.
Integrating Venmo into PayPal Checkout also requires a developer and some code work. PayPal Checkout now offers “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.
Payment Options For Venmo Merchants
While Venmo wasn’t designed for use by merchants, it’s embraced the business community for several reasons. First and foremost, a series of mergers and acquisitions have led to Venmo, Braintree, and PayPal all being part of the same company today. Products that independent companies originally developed can now be integrated to work together more seamlessly, allowing Venmo’s client base to expand to include freelancers, independent contractors, sole proprietors, and other small business owners.
Secondly, the COVID-19 pandemic has highlighted the need for small retail businesses to accept contactless payments to protect their customers and employees. Not every customer uses Apple Pay, Google Pay, or other NFC-based payment methods. However, most consumers today have heard of Venmo and use it regularly. While the pandemic will eventually go away, the ease and convenience of contactless payments will ensure their continued popularity.
Here’s an overview of how you can use your Venmo Business Profile as a payment option for your business:
Using Venmo QR Codes & Contactless Payments
QR codes are the easiest and most affordable way to accept Venmo payments for your business. When you sign up for a Venmo Business Profile, you’ll be issued a QR code that identifies your business and can be scanned to accept a payment. Customers can scan the code directly from the screen on your smartphone or tablet, or you can print the code out and display it in your store. If you want to get fancy, Venmo is currently offering a QR Kit bundle for $14.99 (regularly $24), which includes the following items:
- A set of five stickers (in various sizes)
- A laminated wallet card with a lanyard
- A plastic 2″ x 4″ x 6″ tabletop display with stand
You can also order these items à la carte, although it might cost more.
Using ‘Pay With Venmo’ Buttons For Websites & Apps
Instead of QR codes, eCommerce merchants will want to integrate a Pay With Venmo button as a payment option into their websites or mobile apps. Braintree and PayPal offer options for doing this, and they both feature the same flat-rate processing rate for online transactions.
Either of these options will require you to sign up for a separate account with Braintree or PayPal. You’ll also most likely need a developer to integrate the code onto your website or mobile app and test it to make sure it works correctly. PayPal Checkout and Braintree support recurring billing — a feature that’s not available with just a Venmo Business Profile.
The primary difference between Braintree and PayPal is that Braintree will set you up with a traditional, full-service merchant account, complete with your very own unique merchant ID number. This option will require more paperwork and more underwriting, but your account will be very stable, and — unlike most merchant account providers — there’s no monthly account fee. On the other hand, PayPal is a payment service provider (PSP), just like Square. Accounts are aggregated together, so you won’t get a merchant ID number to identify your business to the credit card processing networks. Underwriting requirements are minimal, and you can usually be up and running very quickly. As with any PSP, the downside is that your account is more vulnerable to a sudden account hold, freeze, or termination.
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 Venmo User Agreement, which you should read before signing up.
Does Venmo Have A Card Reader?
Because Venmo payments use QR codes for in-person transactions, the company does not offer a Venmo card reader of any type. This includes both traditional countertop terminals and mobile card readers that connect to a smartphone or tablet.
Lack of a physical card reader is the primary reason that you cannot rely solely on using Venmo if you operate out of a retail or mobile location. Although the company currently has over 65 million users, that’s only about one out of five of your potential customers. eCommerce-only businesses will likewise need either a merchant account or a PSP account to accommodate customers who wish to pay using their regular credit or debit cards.
Should You Use Venmo For Business?
For most merchants, deciding whether to take payments through Venmo will depend on the nature of your business and your customer demographics (especially since setting up automatic recurring payments through Venmo is currently not an option). Venmo Business Profiles work great for sole proprietors, including freelancers and other independent contractors. Larger businesses can also use Venmo effectively, but you should be aware of the transaction size and volume limits before relying too heavily on this payment method.
You should also evaluate your customer base carefully before adding Venmo as a payment option. If the majority of your customers are young and tech-savvy, they’ll probably already have Venmo accounts and will be happy to use them. On the other hand, if most of your customers are older folks who still prefer to pay in cash, you’ll probably get some blank stares when they see the ‘Pay With Venmo’ QR code in your store.
eCommerce merchants should also be cautious about using Venmo. While it’s a great way to add more payment methods to your site, it might not be a cost-effective option if you need to hire a developer to set it up for you.
In any event, Venmo For Business is a solid option for some business use cases. However, it should only be used as a secondary payment method, as you’ll still want to be able to accept traditional credit and debit cards as well. You might also want to check out our complete guide on Zelle for Business, which offers a similar alternate payment method. Good luck!