For as long as it can be remembered, PayPal and Venmo have been household names in the world of digital payments, offering users convenient ways to send and receive money.
Both are easy to use, cost-effective and under the same parent company (PayPal acquired Venmo in 2013), so it doesn’t come as much of a surprise that they share some similarities. However, their differences make them more or less suitable for different business needs—or personal needs, for that matter.
In general, PayPal is the more flexible platform of the two, as it’s intrinsically designed not only for peer-to-peer (P2P) payments but also for business transactions. On the other hand, Venmo is more geared toward P2P transactions, though it did get a few new features for businesses. However, it still doesn’t hold a candle to the former in this regard.
We compare the two on a couple of key points to help you make a more informed choice in deciding which service to go with.
PayPal vs Venmo Comparison Chart
|Price||Check Price||Check Price|
|Number of Business Accounts||Up to 8 users||1|
|Transfer Limit for Business Accounts||No limit for fully verified accounts||$6,999.99 per week for fully verified accounts|
|Reach||International, 200+ countries||United States only|
|Platforms||Desktop, app||Desktop (only for accessing account info), app|
PayPal Business Features
As noted, PayPal is a multifaceted platform in that it accepts P2P and business transactions, catering to small and medium-sized enterprises. In the same vein, it’s available in more than 200 countries, and it supports 25 currencies. Also, it processes cryptocurrencies and payments made via every major credit card, debit cards, bank accounts and Venmo. All in all, that makes it easy to send and receive payments from just about anywhere in the world.
When it comes to processing fees, it depends on the type of transaction. For instance, online credit and debit card payments are set to 2.59 percent + $0.49 per transaction, while PayPal Checkout, Pay with Venmo, cryptocurrencies and other commercial payment modes cost 3.49 percent + $0.49 per transaction.
What makes PayPal a viable choice for businesses is its Seller Protection policy. Thanks to this, eligible merchants have a degree of security against fraud, particularly when a buyer claims they didn’t receive an item even though they did, or that a transaction was unauthorized. If a transaction meets the criteria of the program, then the company won’t deduct any amount from your balance.
Another notable advantage of PayPal is its name recognition. It’s safe to say that thousands of people know what PayPal is, and trust it to handle their online payments.
Venmo Businesses Features
Venmo’s tools and features for businesses aren’t as robust as PayPal’s. After all, it’s originally a P2P platform that only added a couple of business-centric features. That said, they still improve the experience of long-time users, and they can come in handy for freelancers and sole proprietors.
First off, Venmo now lets users make a business profile, which wasn’t allowed before. That way, you can keep your personal balance and your earnings separate and organized, not to mention that this makes for an easy way for clients who are also Venmo users to pay you.
Moreover, Venmo has a social feed similar to the likes of Facebook. On the app, you can add friends and view and comment on their posts. At first glance, this may not seem much, but it’s an additional space where you can advertise your business. On top of that, you can potentially increase engagement with clients and help stay in touch with repeat customers.
However, it’s worth noting that a Venmo account is restricted to a single user. In other words, you can’t access the same account on two mobile devices. An obvious downside to that is, if you have a business partner, then only one of you can manage it.
PayPal Features for Individuals
For personal use, PayPal is handy in that you can send, receive and request funds from friends and family easily. Also, as a buyer, you can easily make purchases since the service is used by thousands of merchants and stores.
PayPal has some useful consumer-focused features as well. For starters, you can make payments on an installment basis, and you can even open credit and debit cards, as well as avail prepaid cards. Then there’s PayPal Credit, the company’s personal credit line that lets you shop with no interest for purchases of $99 and above—that is, if you pay in full within six months.
Venmo Features for Individuals
As a P2P platform, Venmo is arguably one of the most intuitive and straightforward ways to transfer between two users. For personal use, it’s convenient since it allows users to simply look up the names of people they know to facilitate transfers and the like.
Also, Venmo gives users the option to apply for a debit card. However, on a more interesting note, it offers them a credit card with a 3 percent cash back on your top spending category (out of 8 categories in total), 2 percent on the next and 1 percent on other eligible purchases.
Since Venmo works as a digital wallet, it accrues interest as well. All these rewards (including cash back from its credit card) will reflect in your funds on the app, and if you don’t want to spend your balance via the platform, then you can transfer it to your bank account free of charge.
It goes without saying that there are a lot of differences between PayPal and Venmo, despite the similarities. To sum them up, one of the most important distinctions is their geographic limitation: PayPal has an international reach, whereas Venmo only operates in the United States.
Also, you can send and receive payments through PayPal on the web and on its app. In contrast, Venmo only lets you make and receive payments on its app, though it does allow you to access your account info on a desktop.
As for transfer limits for businesses, you don’t have to worry about them on PayPal, as there are no restrictions. In Venmo’s case, you’re limited to $6,999.99 per week. Take note that these apply only to fully verified accounts.
Last but not least, you can create up to eight users on PayPal business accounts, but on Venmo, you can only make one.
Benefits of Payment Platforms
- Efficient Transactions: Streamline the payment process, making it quick and convenient for both you and your customers.
- Professional Image: Add a professional touch to your business, instilling trust and credibility among customers.
- Security: Offer robust security measures to protect your financial data and transactions, reducing the risk of fraud.
- Expanded Customer Base: Cater to a broader range of customers by accepting various payment methods, including credit cards and digital wallets.
- Record Keeping: Simplify financial record-keeping and tax preparation by providing transaction history and reporting tools.
- Convenience: Send and receive money electronically, eliminating the need for physical cash or checks.
- Splitting Bills: Easily split bills and expenses with friends and family.
- Instant Transfers: Send and receive money instantly when needed.
- Record Keeping: Keep a history of your transactions, making it easier to track and manage your personal finances.
- Mobile Accessibility: Manage your money on-the-go with mobile apps.
At the end of the day, PayPal is better overall for its versatility, and it can accommodate the needs of businesses more. For one thing, it has an international reach, and it doesn’t have transaction limits. On top of that, it allows up to eight users on a business account.
In its defense, Venmo can serve as an additional payment option that freelancers can offer to their clients. That’s aside from its ease of use as a P2P platform. However, it’s limited to users in the United States, so it’s not exactly useful for businesses with a target market in other countries.