Are PayPal and Venmo the same? When you need to send someone money or accept a payment from them, there’s no shortage of digital options at your disposal. The two giants in the space, however, are PayPal and Venmo, to the point that each has come to be used as a verb, as in “PayPal me” or “Venmo me.”
How to wisely choose one over the other largely depends on the kinds of transactions you want to make and the parties with which you want to exchange funds. For instance, personal transactions with people you know, such as paying your babysitter or splitting a restaurant bill with friends, are particularly well-suited to Venmo, where you can also make your payments a more social affair.
Meanwhile, PayPal is the leading choice for transactions that are more purchase-oriented, such as buying from merchants or accepting payments from your own customers. In terms of business payments, Venmo is geared more towards peer-to-peer transactions (P2P) and PayPal is more a business-to-consumer platform (B2C)
Are PayPal and Venmo the same?
Venmo — now a subsidiary of PayPal — is another popular payment app. Venmo users typically use the app to send money to friends, thereby avoiding the hassle of exchanging cash or checks.
While PayPal has expanded into a wider variety of payment-related services, Venmo is still mostly a peer-to-peer payment app. The app is known for its social feed which shows transactions that your contacts complete (unless users opt out). To keep things friendly, you can personalize your payments and payment requests in Venmo with emojis and notes.
Venmo vs. PayPal: Sending Money
The process to send money to someone is fairly similar across the two apps. Both offer the ability to sync your contacts to the app, enabling it to search for any associated PayPal or Venmo accounts held by your friends and family. But even if the app doesn’t surface the contact you’re looking for, you can send money using their username, email address, or mobile number.
After choosing the recipient and the amount, both PayPal and Venmo will ask you what payment method you’d like to use. If you have a positive balance with either service, you can use those funds for your payment. Otherwise, funds will be drawn from the bank account, debit card, or credit card you identify as your desired payment method for this transaction.
Once you hit “send” on your payment, the amount will hit the user’s PayPal or Venmo balance within a couple of minutes, often even seconds. With both apps, you’ll want to make doubly sure you’re sending money to the right contact, since the companies won’t refund your money if you send it to the wrong person.
Venmo vs. PayPal: Requesting Money
It‘s also possible with both PayPal and Venmo to receive funds from someone. With Venmo, you can request funds from another person, creating a reminder for someone to pay you, or provide them with easy access to your contact info and the proper amount of the requested payment. With PayPal, you can securely request funds and customize a message before sending. Requests can only be made to other PayPal users.
Once the person receiving your request for money acts on it by making a payment, the funds will hit your PayPal or Venmo balance almost instantaneously. From there, you can use those funds to make a subsequent payment (or, with PayPal, a merchant purchase), keep them sitting in your account for later use, or transfer them out to your linked bank account.
If you opt to transfer funds to your bank, both PayPal and Venmo give you the further option of how quickly to complete the transfer. Without a fee, you can choose a transfer that will generally be completed the following day, but it can take up to two to three days for either app. If you’re in a rush, both Venmo and PayPal allow you to choose an instant transfer for a small fee.
Venmo vs. PayPal: Additional Features
As you can see, the two services present fairly similarly on basic features and fee structures. But there are a few areas in which the two apps differ markedly. For instance, with its strong focus on transactions between people who know each other personally, Venmo hosts a social feed of transactions that have taken place among people you know, as well as those of strangers, if you opt to view the public feed.
A scroll through the feed of transactions by your Venmo friends will show you who paid who, and with whatever note they shared. The only thing missing is the amount. The feed also supports emojis, which are almost more common than text in the Venmo social feed. When you make your own transactions in the app, sharing them publicly is the default, but you can change this to viewable only by your Venmo friends or only by the recipient, either globally or on a transaction-by-transaction basis.
Where PayPal stands out against Venmo is in its ability to be used by merchant sellers who are accepting payments, as well as shoppers and buyers at online and physical retailers.
PayPal also offers international transactions. Covering more than 200 countries and transacting in about 25 different currencies, PayPal is the app of choice for those who want to pay or accept funds from those outside the U.S. In contrast, Venmo can only be used for U.S. exchanges.
Lastly, both Venmo and PayPal offer their own credit and debit cards, although Venmo’s offering in this area is nascent. By acquiring a debit or credit card, payments to anyone accepting that card type can be charged directly to your PayPal or Venmo account.
What Are Venmo and PayPal?
PayPal and Venmo are both digital payment vehicles, largely operated as smartphone apps. In the same way that writing a check draws funds for a payment from a linked bank account, making a payment with Venmo or PayPal does the same, but with two modern differences.
First, when making a Venmo or PayPal payment, the user can choose where the funds will be taken from, whether it’s the user’s primary checking account, a secondary savings account, a debit card, or a credit card. Second, the transfer of funds happens essentially instantaneously, unlike checks that must be cashed, and that can bounce for insufficient funds.
PayPal is the pioneer in this field, having been established in the late 1990s and then soon after becoming the payment tool that facilitated millions of eBay transactions. Venmo, in contrast, is the new kid on the block, though a popular one. Founded in 2009, Venmo was acquired three years later by Braintree in 2012, and then by PayPal.
How Do Venmo and PayPal Work?
The basic functionality and setup of both services are the same. You create a free account with the service, establishing your security credentials. You then link at least one bank account for transfers and optionally add other payment methods, like additional bank accounts or debit and credit cards.
When you’re ready to pay someone, you enter or search for their contact info, enter the amount to pay, and choose the payment method you’d like to use for the charge. Venmo includes a button to request funds instead of sending them — PayPal does not have a “request” button, but still allows you to receive funds.
PayPal and Venmo fund your payments by creating ACH transfers to and from your linked bank account, while those opting to use a debit or credit card will see the payment amount added to your statement like any other purchase.
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