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Venmo vs. PayPal: Same, but different?

PayPal and Venmo are both popular payment platforms, but they each have their fair share of differences. In certain circumstances it is best to use PayPal. In other cases, however, you prefer to use Venmo.

However, both digital wallets are intended for different target groups and purposes. Before you decide to pay with PayPal or Venmo, you should review the main differences between the two services.

Yes, PayPal has been owned by Venmo since December 2013. Even though Venmo is technically part of PayPal, it's still far from the same service.

In reality, these payment platforms have completely different uses. PayPal is an online payment gateway, while Venmo is a social payment app that is geared towards making payments between friends and family. It's important to note this distinction, as well as some of the finer details we've outlined below.

When it comes to online payments, the first thing to worry about is security. Venmo and PayPal have some major security differences that are likely to be the deciding factor in your choice.

Let's start with PayPal. PayPal comes with seller and buyer protection, which means PayPal can protect both parties if the transaction doesn't work.

In addition to providing refunds, PayPal can reimburse you for products that don't arrive or that don't match the seller's description. The only items that are not protected by this policy are intangible goods and services. PayPal also constantly monitors transactions and uses encryption to protect every payment.

Venmo does not offer buyer protection. In other words, you are basically alone when a payment goes wrong.

For this reason, Venmo's User Agreement states that Venmo "should only be used in transactions with people you know and trust" as Venmo is not normally able to issue refunds.

In addition to the lack of buyer protection, Venmo continues to use encryption to protect your personal data. Venmo also allows you to customize your privacy settings to protect your Venmo account. It is important that you toggle these settings - by default, your transactions will be published!

Venmo and PayPal are two very different types of digital payment services. They are usually not used for the same reasons or even in the same circumstances.

In the early history of PayPal, this was the payment method on eBay. Since then, PayPal has grown a lot - you can now find PayPal as an accepted payment method all over the web. Some physical stores also accept PayPal in-person payments.

PayPal is most commonly used to pay merchants, whether in-store or online. But you can also use PayPal to receive money from just about anyone, making it an incredibly versatile payment platform.

On the other hand, you can only use Venmo under certain circumstances. People usually use Venmo to split a meal bill or just to repay a friend. Some online retailers (who need to be verified by Venmo) also accept Venmo payments. However, Venmo is nowhere near as ubiquitous as PayPal.

And while PayPal is just a digital wallet, Venmo acts like a social media channel. This means you can search for people, add friends, and see a feed of recent transactions. While you can make your account private, Venmo may not sound appealing if you're not a fan of social media.

PayPal and Venmo accept a number of payment methods, all of which are listed below.

Payment methods accepted by PayPal include:

  • Payments straight from your bank account
  • Visa, Discover, MasterCard and American Express cards
  • Funds from your PayPal Cash or PayPal Cash Plus account

You can pay someone on Venmo using the following methods:

  • Payments straight from your bank account
  • Visa, Discover, MasterCard and American Express cards

Venmo vs. PayPal: Fees

Both Venmo and PayPal are free to download and use. Even so, certain types of payments and transfers incur additional fees.

Venmo will charge you instant transfers from Venmo to your bank account as well as credit card payments. Here are two fees to watch out for with Venmo:

  • Credit card payment: 3% fee
  • Immediate transfer: 1% fee

Unlike Venmo, PayPal does not charge any additional fees for using a credit card. However, there is an instant transfer fee charged when sending money from PayPal to your bank account:

  • Immediate transfer: 1% fee

Venmo vs. PayPal: Payment Limits

Both Venmo and PayPal have payment limits. Venmo puts a stricter limit on the amount of money you can spend per week, while PayPal is much milder.

Venmo has different limits on the maximum amount of money you can spend with Venmo. After verifying your identity, the following limits apply:

  • Total shipping limit: $ 6,999.99 per week
  • Paying to a friend or family member: $ 4,999.99 per week
  • Paying to an Authorized Dealer: $ 6,999.99 per week

Once you have verified your account, PayPal no longer has any payment limits. Typically, you can send up to $ 60,000 in a single transaction. However, this amount can change depending on the currency.

Venmo vs. PayPal: Withdrawal Time

Venmo and PayPal offer both standard and instant withdrawals to your bank account or card. The option you choose depends on how fast you want your money to be and if you are willing to pay the instant transfer fee.

PayPal offers two withdrawal speeds:

  • Standard transfer: one working day
  • Immediate transmission: within 30 minutes

Similar to PayPal, Venmo also offers two withdrawal speeds:

  • Standard transfer: one to three working days
  • Immediate transmission: within 30 minutes

PayPal and Venmo are available both as mobile apps and through your web browser. It is important to note, however, that Venmo has some limitations on its desktop site.

You can use PayPal for its Android and iOS apps as well as the desktop-based payment gateway. Thousands of online merchants accept PayPal, making it one of the most convenient ways to pay for products online.

Venmo is also available as a mobile app for Android and iOS that you can use to pay friends and family. But as I mentioned earlier, Venmo isn't that fully featured on its desktop site.

While you can use the browser version of Venmo to browse you and your friends' transactions, you cannot use it to pay someone.

PayPal has several uses. Not only is this a fantastic way to send cash to your friend, but it is also a reliable way to buy products online. Overall, PayPal wins this battle.

That doesn't mean Venmo is bad - it's just missing. You can only use Venmo with close friends, family, and a limited number of merchants, and it doesn't offer much buyer protection.

If you find that both of the apps aren't for you, you'll be pleased to hear that there are tons of other online payment services out there that you can try out instead.