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As a business owner, you may already use Venmo to send money back and forth to your friends and family. But did you know that by creating a Venmo business profile, you may be able to use the app to accept payment from customers?
Venmo is a digital wallet that was originally intended to provide a cashless way for people to split bills or send cash to friends and family. Until recently, you couldn’t use Venmo for business transactions, but Venmo has begun to loosen its restrictions around using its app for commerce. Now, many freelancers and small-business owners can also accept Venmo payments for their goods and services. But who exactly can use Venmo for business? And what are its advantages and limitations? Here’s what you should know.
- Venmo for business: what you need to know
- Advantages and disadvantages of using Venmo for business
- Deciding if Venmo is right for your business
- Next steps: If Venmo for business isn’t right for you, consider these alternatives
Venmo for business: what you need to know
Venmo launched a limited pilot of business profiles in July 2020. Then in February 2021, Venmo announced that 150,000 businesses were using the payment option — and it decided to expand access to all eligible sellers. Side hustlers and small-business owners alike can now accept Venmo payments in person, online or inside their mobile apps.
Venmo offers several tools to help business owners market their services and reach new customers, including a profile picture on your page and a link to your website. But there are costs associated with accepting customer payments in the Venmo app. Below, we break down the basics of how Venmo for business works.
How you can use Venmo for business
Venmo still prohibits businesses from using its app to receive payments for goods or services on their personal profiles. So to begin receiving business payments and ensure you receive payment, you’ll first need to apply for and receive authorization for a new business profile. Once approved by Venmo, you can begin accepting payments virtually via the Venmo app or in store with your Venmo QR code.
But if you want to accept payments at checkout on your business website or app, you’ll need to get set up with PayPal Checkout and add Venmo as a payment option. To do this, you may need to work with a developer, and you’ll need to use the Braintree payment platform to integrate Venmo payments.
Who can use Venmo for business?
Venmo is working on making business profiles available to all sellers. But for now, Venmo seems to be targeting sellers who are sole proprietors or businesses that include artists, craftspeople, photographers, dog-walkers, hair stylists and more. But its list of business profile categories is extensive.
What you need to set up a Venmo business profile
If you already have a Venmo personal account, look for the “Business Profile” option in the main menu of the Venmo app. If you don’t have a personal profile, you’ll need to set one up at the same time as your business profile.
Once you have an established Venmo account, you’ll start the process of creating your business account by tapping on your profile picture. Next, you should see the option to “Create a business profile.”
Businesses may be able to move straight forward to customizing and publishing their profiles. The process could be fast for registered businesses as well if Venmo is able to find the business entity inside the national database that it uses.
But if Venmo can’t confirm your registered business automatically, you may need to provide a few verification documents. Specifically, you may be asked to submit documents that verify your business’s employer identification number, address and legal registration.
Advantages and disadvantages of using Venmo for business
Now that we’ve covered the nuts and bolts of using Venmo for business, let’s take a closer look at some of its most notable benefits and drawbacks. Here are a few things to keep in mind as you consider whether it’s right for your business needs.
Allows contactless payments
Many shops now offer contactless debit and credit card payments as a way to encourage social distancing and prioritize the health of their customers. But that requires hardware that may be difficult for some single-person businesses to afford.
With Venmo for business, you can easily begin receiving contactless payments from your customers — no additional hardware required.
Just use your phone to scan your customer’s QR code, or they can scan your code to make the transaction. And if you have a walk-in shop, you could prominently display your QR code right on the counter.
May help market your business
The social aspect of Venmo can work to your advantage as a business owner. By allowing your customers’ purchases to appear in their feeds, you can essentially gain free marketing to their social circles each time you make a sale.
But that’s not the only way that Venmo could help you promote your services and expand your presence. You can also elect to have your business appear in search. And you can even give Venmo permission to highlight your business in targeted emails and notifications.
But to maximize these features, it’s important include as much as detail as you can on your business profile. You’ll want to at least include a profile picture and brief description of your business, along with your business website if you have one.
You can create a customer loyalty program
Venmo keeps track of all your transactions and your customer list. Using this list, you could send out special offers and incentives to encourage repeat sales.
There are weekly payment limits
Unfortunately, Venmo’s business profiles come with the exact same transaction limits that apply to its personal accounts. For verified accounts, the combined weekly limit is $6,999.99.
Of that $6,999.99 combined limit, no more than $4,999.99 can be person-to-person payments. So if you only accept payments through the Venmo app and opt not to connect Venmo through PayPal to your business website or app, your weekly limit will be capped at that $4,999.99 limit.
Only available to businesses in the U.S.
The Venmo app isn’t currently available internationally. So if your business is located outside the United States, Venmo for business won’t be the right payment solution for you.
Nonprofits are also ineligible to sign up for Venmo’s peer-to-peer payment experience. But they may be able to add Venmo as a checkout option to apps or websites using Braintree or PayPal checkout.
No split payments allowed
For business transactions, Venmo users can’t split a payment between their account balance and their preferred payment method. So, let’s say your customer has $20 in their Venmo account and makes a $25 purchase from you. In this example, $25 would be pulled from the customer’s preferred payment method rather than using the $20 Venmo balance first and pulling the remaining $5 from their preferred payment method.
Not necessarily deal breakers
- Business and personal accounts share a login. You’ll use the same login for both your personal and business Venmo account. This makes it easy to toggle between the two accounts, but it could get confusing.
- There may be extra costs to consider. While setup is free and there are no monthly fees, transaction fees do apply. For peer-to-peer payments, that fee is 1.9% + 10 cents. Website transaction fees are determined by PayPal Checkout and app purchases are subject to Braintree’s fees. Currently, both of these payment processors generally charge 2.9% + 30 cents per transaction.
- Customers may be able to get purchase protection. Transactions made on an authorized merchant’s app or mobile website using Venmomay be eligible for the Venmo Purchase Program, which can cover the buyer’s cost if an item they received was significantly different than described. Peer-to-peer payments, though, aren’t eligible for Venmo Purchase Program protection.
Deciding if Venmo is right for your business
Freelancers, side hustlers and small businesses without brick-and-mortar locations might find that using Venmo for business is an easy way to accept contactless payments from customers. But if you’re a store owner who already has a point-of-sale terminal capable of accepting touch-free payments from EMV chip cards or mobile wallets, adding Venmo to the mix may not be necessary.
Next steps: If Venmo for business isn’t right for you, consider these alternatives
If you’ve decided that Venmo isn’t right for your business but still want to offer a contactless payment option for your customers, you could consider adding Apple Pay or Zelle.
Apple Pay has a broad customer base as the app comes installed on all iPhone devices. But one of the disadvantages with Apple Pay is that you won’t be able to use it for in-person transactions without first obtaining a point-of-sale terminal that’s able to accept contactless payments. Zelle is another popular peer-to-peer payment platform that many banks use. But not all banks and credit unions that offer Zelle to their customers also offer it for small businesses. First, you’ll need to check with your financial institution to see if you can use Zelle for business transactions.