How Venmo Works

What's even better than going to a ball game with friends? Being able to relive it through emojis and inside jokes when reimbursing your buddy for the seat. Venmo understands that financial exchanges with friends and family are inherently social - which is why it makes QR codes, tagging and commenting central to its app.


Venmo, a once P2P-only app and now PayPal-owned company, offers an array of digital and physical payments products, including co-branded credit and debit cards that connect to your Venmo profile with a QR code printed on the plastic.



P2P Pay


Expression is what sets Venmo's app apart from other peer-to-peer (P2P) payments services like PayPal, Square Cash and Zelle. With many fun visuals available to articulate the reason behind your payment, you can share a story of activities with friends or other social experiences.


SETTING UP AN ACCOUNT

As is the case with other P2P apps, Venmo asks for your e-mail address and phone number when creating an account so that your contacts can easily find you. Additionally, you'll also select a social handle (e.g., @venmo-guy) similar to Square's cashtag and be able to access a QR code that friends can scan to pay you.


When navigating to the app's main screen, you'll see a feed of your contacts' public transactions that can be liked or commented on and, when swiping right, a history of your personal transactions.


SENDING & REQUESTING MONEY

To make a payment to a friend, family member or colleague, simply tap the "Pay or Request" button at the bottom of the main screen and type the e-mail address, phone number or username of your recipient(s). Alternatively, you can scan a contact's QR code to select them as the recipient. Then, enter the amount and go to town with text, stickers and emojis that reflect the nature of, or add humor to, the payment.


While Venmo encourages social transactions, you're always given the option of making a payment only visible to mutual friends or completely private to the recipient by tapping on the "Public" label of the payment screen. Payments will settle between one and three business days unless you select the "Instant" option that processes the transaction immediately for a 1% fee. Note that the maximum you can send over the course of a week with Venmo is $5,000 (which is also the maximum you can send in a single transaction).


Requesting money on Venmo works very similarly to sending it. Select the "Venmo Me" button from the Scan option at the bottom of the main screen or follow the same steps as above, selecting "Request" instead of "Pay" to complete the transaction.


Venmo Card


The Venmo Card lives inside the Venmo app but is issued and serviced by Synchrony Bank. There's no annual fee charged by the bank and, upon approval for the card, you'll be able to personalize it in the color of your choice.


EARNING REWARDS

If you're the type of cardholder that's always sure to use the card that pays the highest rewards in a given spend category, you'll enjoy Venmo's automatic payout of 3% cashback for your most-used category, 2% back on your next most-used category and 1% back on all other categories. There's no manual work on your part as spending changes from month to month - your top category will still get the maximum 3% back and so forth.


While you can surely find better earn rates for categories like travel, dining, gas and grocery, I find 2-3% back to be a compelling value proposition for some of Venmo's other eligible categories like health & beauty (e.g., drugstores) and bills & utilities. Additionally, redeeming these rewards is about as simple as the rest of the Venmo app: the cashback you earn will show up in your Venmo balance at the end of your statement cycle by default - and you have the option of choosing to apply it as statement credit instead.


MAKING PAYMENTS

Once approved, you can use the virtual version of your Venmo card anywhere online and when the physical Venmo card arrives in the mail, you can use it anywhere Visa is accepted. Unfortunately, the card can't yet be added to a mobile wallet like Apple Pay.


When you make a purchase with the card, you'll receive real-time notifications that notate the amount and merchant of the transaction, which can be helpful in protecting against fraud. As you might expect, each purchase made can be used as the starting point to settle up with friends, using the "Split Transaction" and "Request" buttons on the transaction screen inside the app.


Since the Venmo card is affiliated with Venmo, some misinterpret the credit card as being interchangeable with debit cards and bank accounts linked to your Venmo account. Note that using your Venmo card to make a P2P payment will incur a 3% transaction fee, the same way any other credit card would when using it to pay to a person instead of a business.


MANAGING THE CARD

Accessing your card is just two quick taps once logged into the app: go to the sandwich menu in the upper right hand corner and then to the "Manage" button. You'll be able to conveniently view card details such as your balance, purchase APR, available credit, card information and settings - information that's not always so accessible with other co-brand credit cards.


By design, the card is tightly integrated with the Venmo experience. As such, your bill payments and rewards disbursements will show up in your Venmo feed, just as other Venmo transactions do. Where the card is not well-integrated is with other personal finance apps that pool account activity to help paint a full picture of your finances. Unfortunately, you shouldn't expect to be able to link your Venmo card with many of the main budgeting apps.


Pay with Venmo


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NOTE: This review was based on Version 8.22.0 of the Venmo iOS mobile app