In recent years, Venmo has become a popular way to request money, pay friends, and easily split checks, but it is also becoming increasingly popular as a virtual payment system for businesses. Although Venmo isn't the only choice out there, it does have advantages and disadvantages you should be aware of when choosing a virtual payment system for your company.
How Venmo Works
Venmo's basic setup is quite simple. Customers can link a bank, credit, or debit card to the mobile app from which they can send or request money with the touch of a finger.
As a business, you can use the app to collect payments for a processing fee of 2.9 percent plus 30 cents per transaction. Customers are not charged any additional fee unless they pay with a credit card; using a debit card or bank account is free.
Millennials are already accustomed to using Venmo thanks to its speed, convenience, and social aspects, so if your customer base falls largely within this demographic—or you would like it to—this is a big advantage to using Venmo for your business.
And because Venmo is now owned by PayPal, the two products work together, which means you can have each as options to cover both millennials and users who might still be more comfortable with PayPal.
The social aspect of Venmo is another plus. Users can choose to have transactions appear on Venmo's social feed, enabling them to share their activity and purchasing recommendations with friends and beyond. The app also has additional built-in social media features through which clients and businesses can communicate right inside the app. This kind of social exposure is essentially free advertising for your business.
Venmo is so straightforward as an online payment system that it doesn't have the bells and whistles of other services, such as invoicing, discounts, or the ability to set up recurring payments. If you need more support services attached to your virtual payment system, you may want to look elsewhere.
Another potential disadvantage is that not everyone is ready to purchase through yet another new payment system. Still, if you want to try Venmo out, you could, for example, offer it as an option alongside the more traditional PayPal.
Other Virtual Payment Options
Google Pay has excellent name recognition, meaning many customers trust it, but it does require Google account registration, which can be cumbersome for some users, and can't be linked with a bank account.
Amazon Pay can be particularly useful if you already have Amazon customers for your business, but it isn't especially customizable and has higher transaction fees than Venmo, PayPal, or Google Pay.
Two other options are Square and Stripe, which, unlike Venmo, offer additional features besides just being a payment service. Square has as a mobile card reader and the ability to keep track of inventory through the app, for example. Stripe is especially great for businesses that can take advantage of its customizable nature, which allows you to create your own fully integrated checkout form.