Venmo vs. PayPal comparison may sound unnecessary since these two are arguably in different leagues. With more than 400 million users, PayPal is the undeniable giant against the smaller Venmo, which is limited to the United States and only has around 80 million users. PayPal is also an older and more established brand compared to the ten-years-younger Venmo. Also, Venmo is owned by PayPal.
Finding the best digital and mobile payment service is not just about examining the number of users or the longevity of the service provider. Bigger does not always mean better. Company size and reach matter, but it is also important to examine other factors such as security, fees, and ease of use. Learn more about Venmo and PayPal through this comparison.
Venmo in a Nutshell
A popular payment service among younger people, Venmo was created with the goal of giving family members and friends a convenient way to split bills and share funds through a mobile application. It is designed to work like a small social network for peer-to-peer money transfers. It has a timeline feed through which those with connections can send and receive funds with emoji messages. The amounts being transferred are not shared, though.
PayPal in a Nutshell
PayPal is one of the oldest online money transfer platforms. Launched in March 2000, it once served as eBay’s payment facility before it was spun off into an independent entity in 2015. PayPal was known for giving consumers an attractive alternative to paying purchases with credit cards, which was relatively easy to “steal,” since criminals only needed to know the credit card details to use them. PayPal users link their bank accounts to their PayPal accounts, so they can make payments or receive funds through the PayPal service without revealing their bank information.
Features and Services
Venmo started with a focus on fast payments designed to match the social media-driven connections of people at present. However, it has since evolved into a one-stop shop for fund transfers. It also supports the buying of cryptocurrency. Listed below are the highlight features of Venmo.
- Free sending and receipt of funds from the Venmo balance or linked bank account
- Personal account (verified) transaction limit of $7,000 per week on purchases and $60,000 for fund transfers
- Business accounts can send up to $25,000 per week
- FDIC pass-through insurance protection for account balances
- Convenient automatic bill splitting
- Credit card with 3% cash back
- Debit card option to withdraw Venmo funds from ATMs
PayPal has more features than VenMo. It has functions and features for personal, business, and enterprise accounts. Here’s a list of its other notable features:
- Instant fund transfers with zero fees for transfers funded by PayPal and linked bank account balances.
- Instant fund sending and receipt
- Quick integration with online stores
- Personal money management features, including check depositing, bills payment, and direct deposits
- FDIC pass-through insurance
- Debit card option to withdraw PayPal funds from ATMs
- Various business features, including POS system integration, invoicing, installment payments, and risk management and reporting tools
- Pay later option for enterprises
- Fraud protection
- Higher transaction amount limits compared to Venmo
Which has more features? PayPal definitely wins with its more extensive features for personal, business, and enterprise applications.
Security and Privacy of Venmo and PayPal
Since Venmo is part of the PayPal family, many would likely expect that it is just as secure as PayPal. However, there were some criticisms about this payment platform as it revealed details about users’ activities by default. It was also relatively easy to find the accounts of certain personalities, as demonstrated by BuzzFeed when it found the account of US President Biden in a matter of minutes. Venmo has since addressed these security and privacy concerns, but it would be too optimistic to believe that no similar or related issues would emerge in the future.
Venmo says that it uses encryption technology to secure transactions and user information. However, it does not specify what specific encryption technology is employed. This is possibly because it was once criticized for claiming to have bank-grade security even though it could not prove it. Nevertheless, Venmo allows users to set a PIN for their app as an added layer of protection.
PayPal, on the other hand, emphasizes the privacy of users’ bank and other sensitive information. It prevents merchants or fund recipients from knowing credit or debit card numbers or what bank is being used. It also provides end-to-end data encryption and multi-factor authentication. Additionally, PayPal requires a one-time password (OTP) whenever users log in and sends an email or text confirmation for every transaction. It also has an advanced fraud monitoring and prevention feature.
Ease of Use: Which is Better Between Venmo and PayPal?
Ease of use is Venmo’s forte, especially when it comes to casual fund transfers. However, both Venmo and PayPal are easy to use. Venmo may be the choice of the younger social media savvy generation, but PayPal also has its advantage as one of the first players in the online payment space. Many are already familiar with its interface and processes. Both services have mobile apps and web interfaces.
Which is more convenient: Venmo or PayPal? It depends on the intended use. For personal transactions, Venmo is the preferred option, especially since it does not charge a fee for most transactions. PayPal is the better choice for business and enterprise uses.
Which Has Better Customer Support Between Venmo and PayPal?
Both Venmo and PayPal provide customer support through chat, email, and telephone. It would be difficult to compare the quality of support these companies provide. A quick search online would show complaints about the customer support both provide. However, it would be reasonable to expect better support from PayPal, since it has been in the business much longer and it charges fees for almost everything.
Fees: Which Has More Affordable Rates?
Venmo is the more affordable option. Fund transfers and receiving money are free of charge as long as they are funded by the Venmo or linked bank account balance. PayPal charges almost all fund receipt transactions.
PayPal does not charge money transfers from PayPal or linked bank account balances, but it imposes a 2.9% fixed fee for transfers through debit and credit cards, 5% minimum fee for international transfers, and other applicable fees depending on the country of the transaction.
Here’s a quick look at the main differences between Venmo and PayPal.
|Interface||Mobile (Android, iOS) and web app (website)||Mobile (Android, iOS) and web app (website)|
|US dollar||Over 25 currencies including USD, AUD, CAD, CNY, EUR, JPY, MXN, and GBP|
|No fee for fund transfers from Venmo and linked bank account balances, 3% charge if amount is from a credit card||No fee for fund transfers from PayPal and linked bank account balances, 2.9% fee for credit and debit card sourced funds plus additional fees depending on the currency used|
|0 fee for Amex Send Account transfers||0 fee for Amex Send Account transfers|
|Transaction limits||$60,000 weekly person-to-person fund transfer limit for verified personal and merchant accounts||No weekly/monthly limits but transaction amounts may be capped at $10,000 to $60,000 depending on the currency used|
|$7,000 weekly spending limit for verified accounts|
|Account balance insurance||FDIC pass-through insurance||FDIC pass-through insurance|
|Security||Transaction encryption, optional PIN for apps||End-to-end encryption, two-factor authentication and OTP for logins, fraud monitoring and prevention|
|Availability||United States||Worldwide, 190+ countries|
Comparing the Son and the Father
The choice between Venmo and PayPal ultimately boils down to the intended usage. If you only need a payment platform to be used in the US and for relatively small amounts, Venmo may be more preferable. If you need more features, better security, and the global availability and customer support, PayPal is the no-brainer choice.
Venmo may be related to PayPal, but it does not carry all of its features, especially regarding security and fund management. It may eventually expand its reach and add more features to better secure transactions and private information. However, for now, it is still a fledgling payment platform, with its parent looming large as the more mature option.