Venmo is a peer-to-peer payment app mostly used for sharing bills, and regular people send money amongst themselves. However, Venmo for business is another branch of the service that businesses should add to their accepted payment options.
Venmo is owned by PayPal, and it’s a great alternative to the payment processing giant. Therefore, since it’s backed by a reputable parent company, you can trust Venmo to accept payments for your business.
Giving customers another way to complete payment reduces friction during checkout. The cart abandonment rate is 70.19%. Difficulty in paying is one of the reasons contributing to this high rate. Hence, by adding Venmo, you may reduce your checkout abandonment rate, and that leads to more revenue and profitability.
What Is Venmo For Business?
Venmo is a digital wallet that makes it easy for people to pay one another in the United States. However, you can create a Venmo business account, which allows your customers to pay you using the app. Creating a Venmo account is free, and you can start accepting payments to your connected bank account on the same day.
How To Set Up Venmo For Business
Now let’s look at how to set up Venmo for business. Here is the step-by-step process that you should follow and can be completed within one day:
- Create an account: Start by creating a business Venmo account, which you can do by downloading the Venmo app. During the signup process, you’ll be asked to decide between personal and business accounts – choose the business one.
- Add relevant information: Entering your email, phone number, and bank account is enough to open a business account.
- Complete the profile: Now you must add your business information such as the name, address, profile picture, and more. Finally, your customers can pay you by using Venmo.
Furthermore, you can integrate Venmo if you’re already offering PayPal checkout for customers. Setting up the integration gives customers an alternative payment method and is simple to complete.
What Are The Advantages of Using Venmo for Business?
Are you not sure if adding Venmo for your business is a good idea? Then let’s look at the top advantages to help you make the right choice.
- Speed: The peer-to-peer technology of Venmo allows customers to pay instantly. The Venmo business version allows you to instantly accept payment. This helps with cash flow since you can get your hands on the money quicker to pay for more inventory and other business expenses.
- Integrations: Venmo has excellent integration with e-commerce platforms like Shopify, PayPal Commerce Platform, Auction.io, and much more. Therefore, there’s no need to invest in new platforms or change the digital infrastructure of your business. Hence, adding Venmo to your existing digital business should be a smooth process.
- Marketing: Venmo has a social feature that promotes word-of-mouth marketing. This means that when a customer buys products from you, their social circle will see the transaction. Therefore, this gives you a low-cost way to generate extra sales.
- Customer engagement: Customers who buy using Venmo can leave comments and likes. This gives you more data points to learn more about how your business is viewed by customers.
- Security: Venmo is a trusted brand that has a good track history with regard to security. The safe and secure payment method means customers shouldn’t have problems linking their bank account to the app.
How Much Does Venmo Charge For Business?
When setting up your business to receive payments, you need to consider the relevant costs so you can calculate the effect on profitability. Businesses using Venmo to accept payment are charged for every transaction over $1.
The seller transaction fee when a business Venmo account accepts payment from another Venmo account is 1.9% + $0.10. This means the fee scales with the transaction size, and there’s a small flat fee.
Let’s say that you accept a payment of $100 from a customer, then the Venmo transaction fee would be $2, and your business account will receive $98.
Furthermore, if your Venmo business account wants to accept “Tap to Pay on Android” or “Tap to Pay on iPhone” payments, then the transaction fee is higher at 2.29% + $0.10.
Some Reasons Why You Shouldn’t Use Venmo
For a balanced overview, let’s consider some of the top reasons why you shouldn’t use Venmo. Understanding the negatives will help you set the right expectations when using the payment processor:
- Fees: The fees at Venmo may seem high compared to other payment processors. Therefore, you need to figure out if you can retain profitability when taking the fees into account. The biggest drawback of the fee structure is that it scales with the transaction size. Therefore, the bigger transaction will result in big charges, so you may want to find fixed-fee payment processors as an alternative.
- Limited to the United States: Venmo is only available to users within the United States. Therefore, to accept international payments, you’ll need to look for alternatives. However, Venmo is still worth adding if you have an international business and accept customers from the United States.
- Money doesn’t go straight to your bank account: When you receive Venmo payments, the funds end up in your Venmo account. Therefore, you will need to manually withdraw the funds to your linked bank account.
Should You Use Venmo for Business?
Venmo for business is worth using if you sell in the United States and agree with the fee structure. Adding Venmo gives your customers more flexibility when completing the checkout process.
Therefore, by adding Venmo, you can potentially get more customers and increase the number of sales. It’s one of the more popular ways of accepting payments, so take a closer look to see if it’s the right match for your business.
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