PayPal and Venmo are both popular payment platforms, but they each have their fair share of differences. While it’s best to use PayPal in some circumstances, you may prefer to use Venmo in others.
That said, both digital wallets are meant for different audiences and purposes. Before you decide to pay with PayPal or Venmo, check out the key differences between both services.
Is Venmo Owned by PayPal?
Yes, PayPal has owned Venmo since December 2013. Even though Venmo is technically a part of PayPal, it’s still far from the same service.
In reality, these payment platforms have entirely different uses. PayPal is an online payment portal, while Venmo is a social payment app geared towards payments between friends and family. It’s important to note this distinction, as well as some of the finer details that we’ve outlined below.
Venmo vs. PayPal: Security
When it comes to online payments, the first thing you worry about is security. Venmo and PayPal have some major security differences, which will likely be the deciding factor in your choice to use either one.
Let’s start with PayPal. PayPal is outfitted with seller and buyer protection, which means that PayPal can protect both parties if the transaction doesn’t work out.
Not only can PayPal provide refunds, it can also reimburse you for products that don’t arrive or don’t match the seller’s description. The only items not protected under this policy are intangible goods and services. PayPal is also constantly monitoring transactions, and uses encryption to protect each payment.
Venmo offers no buyer protection. In other words, you’re basically on your own if a payment goes wrong.
This is why Venmo’s User Agreement states that Venmo “should only be used to transact with people you know and trust,” as Venmo typically can’t provide refunds.
But besides the lack of buyer protection, Venmo still uses encryption to protect your personal information. Venmo also allows you to adjust your privacy settings to help secure your Venmo account. It’s essential that you toggle these settings—by default, your transactions are made public!
Venmo vs. PayPal: Usage
Venmo and PayPal are two very different types of digital payment services. They typically aren’t used for the same reasons or even in the same circumstances.
In PayPal’s early history, it was the go-to payment method on eBay. Since then, PayPal has greatly expanded—you can now find PayPal listed as an accepted payment method all over the web. Some physical stores accept in-person PayPal payments as well.
PayPal is most often used as a way 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 in certain circumstances. People typically use Venmo to split a dinner bill or simply pay back a friend. Some online merchants (which must 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. Although you can make your account private, Venmo still might not sound appealing if you’re not a fan of social media.
Venmo vs. PayPal: Accepted Payment Methods
PayPal and Venmo accept an array of payment methods, all of which are outlined below.
PayPal’s accepted payment methods include:
- Payments directly 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 these methods:
- Payments directly 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. Despite this, certain types of payments and transfers result in added fees.
Venmo charges you for instant transfers from Venmo to your bank account, as well as for payments made with a credit card. Here are two fees to look out for on Venmo:
- Credit card payment: 3% fee
- Instant transfer: 1% fee
Unlike Venmo, PayPal won’t charge you extra for using a credit card. It does, however, charge an instant transfer fee when sending money from PayPal to your bank account:
- Instant transfer: 1% fee
Venmo vs. PayPal: Payment Limits
Both Venmo and PayPal have payment limits. Venmo puts a tighter cap on the amount of money you can spend per week, while PayPal is a lot more lenient.
Venmo has different limits for the maximum amounts of money you can spend with Venmo. After you verify your identity, the limits are as follows:
- Overall sending limit: $6,999.99 per week
- Payment to a friend or family member: $4,999.99 per week
- Payment to an authorized merchant: $6,999.99 per week
Once you’ve verified your account, PayPal doesn’t have any payment limits. You can typically send up to $60,000 in a single transaction, but this amount can change depending on your currency.
Venmo vs. PayPal: Withdrawal Time
Venmo and PayPal both offer standard and instant withdrawals to your bank account or card. The option you choose depends on how fast you want your cash, and if you’re willing to pay the instant transfer fee.
PayPal offers two withdrawal speeds:
- Standard transfer: one business day
- Instant transfer: within 30 minutes
Much like PayPal, Venmo also provides two withdrawal speeds:
- Standard transfer: one to three business days
- Instant transfer: within 30 minutes
Venmo vs. PayPal: Platforms
PayPal and Venmo are both available as mobile apps, as well as from your web browser. But it’s important to note that Venmo comes with some limitations on its desktop site.
You can use PayPal on its Android and iOS apps, along with its desktop-based payment portal. Thousands of online merchants accept PayPal, easily 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, both of which you can use to pay friends and family. But like I mentioned, Venmo isn’t as full-featured from its desktop site.
While you can use the browser version of Venmo to browse through you and your friends’ transactions, you can’t actually use it to pay anyone.
Venmo or PayPal: Which Comes Out on Top?
PayPal has several different applications. Not only is it a fantastic way to send your friend some cash, but it’s also a reliable method for buying products online. Overall, PayPal wins this battle.
That’s not to say that Venmo is bad—it’s just lacking. 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 apps aren’t for you, then you’ll be happy to hear that there are a ton of other online payment services that you can take for a spin instead.
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