How does Wenmo make money? (full list of methods)
Venmo is a popular money transfer app that has been available on Apple and Android devices since 2012. It allows users to send and request money to friends, transfer it to their bank, and pay for business.
But how does Wenmo make money? Well, Venmo actually earns more ways than you might expect, and this article will tell you everything you need to know!
How will Venmo make money in 2022?
In 2022, Venmo as a company can make money in a number of ways. One common way is through an instant transfer service, which charges each user a percentage. Additionally, Venmo charges fees associated with its debit and credit card services, such as interchange fees, withdrawal fees, and paying friends’ credit cards.
There are many specific ways Venmo generates revenue, so read on to find out what you should be aware of as a Venmo user!
1. Instant transfer
One of the easiest ways Venmo makes money is through the fees it charges for instant transfers.
If a user wants to transfer funds from their Venmo account to their bank immediately, there will be a fee of 1.5% of the transferred amount.
Venmo makes a ton of money from people using instant transfers.
An alternative to an instant transfer is to leave the funds in your Venmo account or wait 1-3 business days for the funds to arrive in your checking account.
2. Credit Card Fees
You can link a credit card to your Venmo account and use it to send money to family and friends.
However, when you send money via Venmo with a credit card, there is a 3% fee.
This is one of the ways the Venmo app generates revenue. Additionally, Venmo cardholders pay an annual interest rate, depending on the account type and prime rate.
However, keep in mind that if you use a credit card to make an online purchase with Venmo, there will be no fees as long as it’s a business that accepts payments from Venmo.
3. Cash Interest
Venmo lends the cash already in the system to various banks. In return, the company receives an average loan fee or net interest margin. In 2019, the borrowing fee was 3.35%.
4. Withdrawal fees
If a Venmo user has an official Venmo debit card, they can use it to withdraw cash from their Venmo balance at an ATM.
However, withdrawing funds from your Venmo balance will incur a domestic withdrawal fee of $2.50 and an over-the-counter transaction fee of $3.00.
5. Interchange fee
Venmo offers Visa-powered users special credit cards that are accepted at thousands of businesses across the country.
Additionally, Venmo offers Mastercard-branded debit cards.
Both methods are available to Venmo account holders and can use their Venmo balance in the “real world” to pay for items and services.
When a customer pays at a business with a Venmo credit card, the merchant pays a percentage of the purchase, plus a flat rate of $0.10.
Venmo makes a lot of money from interchange fees it charges businesses that accept Venmo credit cards. However, such fees are not charged to Venmo users.
6. Cash the check
Cash a Check is a newer feature that allows users to deposit checks into their Venmo account. This includes salary and government stimulus checks.
Venmo charges a 1% fee on all payroll and government check deposits and a 5% fee on all other acceptable checks deposited with Venmo.
To deposit a check, it must be worth between $5 and $5,000.
Again, in order to use this feature, you need to have a verified email address and a direct deposit or official Venmo debit card.
7. Cryptocurrency fees
Fees apply for transactions that involve buying and trading cryptocurrencies on Venmo. Note that these fees vary based on how much you spend on cryptocurrencies.
For example, buying cryptocurrencies from $25 to $74.99 will require a fee of $1.99 to Venmo.
Also, the flat-rate dollar fee turns into a percentage once you spend more than $200 on cryptocurrency.
8. Cash Back Program
Venmo debit and credit card holders are eligible for a cash back program that allows them to earn cash back on purchases at certain vendors that have deals with Venmo.
Venmo earns a referral commission based on the number of customers acquired when Venmo cardholders shop at these select merchants.
This amount will depend on the agreement between Venmo and the merchant.
To learn more, you can also read our posts on Does Venmo Work in Canada, How to Delete Venmo History, and Why My Venmo Account Is Suspended.
in conclusion
Venmo makes money through various fees and other aspects of its business model. For example, Venmo debit and credit card users often pay withdrawal and credit card fees.
Businesses pay a percentage of fees and flat rates when customers use the Venmo credit card to purchase goods and services. Also, cashing a check on Venmo will cost 1% of your payslip or government check, or 5% of other accepted checks.
