The popularity of cashless, peer-to-peer (P2P) payment services like PayPal-owned Venmo is growing, making Venmo for Business a payment method small businesses should consider. Today, more baby boomers and Gen Xers are joining millennials and Gen Zers in embracing contactless payment methods. Contactless payments require smartphones, which many people keep in their hands or within easy reach, eliminating the need to fumble with a purse or wallet to retrieve a credit card. Contactless payments also make checkout faster, benefiting both customers and businesses.
If younger people comprise a significant element of your customer base, if you have a new business or want to add additional payment options for your small business, here’s what you need to know about Venmo for Business.
Understanding how the core Venmo service works is essential when considering using Venmo for Business.
Venmo is one of the most popular P2P payment services, with more than 78 million subscribers. In simple terms, a P2P service is a digital wallet someone can use to pay another person using a mobile phone app.
If someone is just getting started with Venmo, they’d download the iOS or Android Venmo app; create a personal profile; and link their Venmo account to a bank account, credit card or debit card. They could then start sending and receiving money from other Venmo users.
There’s no cost for using Venmo as a P2P contactless payment solution. However, if you use a credit card to fund the money you’re sending someone, there’s a 3 percent fee.
One of Venmo’s unique features is that, in addition to sending money, it makes user payments public via a social media-like newsfeed (unless you opt out). This feature can serve as a form of social media marketing for your business.
While teens and millennials sending money to each other make up 82 percent of Venmo’s user base, the next natural step is using Venmo to pay companies for goods or services.
Venmo launched Venmo for Business in 2021, letting small businesses create business profiles that allow them to accept Venmo as a digital payment method. Since then, more than 2 million merchants have signed on to accept Venmo for payments.
If you want your small business to offer Venmo as a payment option and accept Venmo payments from customers, you must set up a Venmo account, add a business profile and enter your business information.
If you already have a personal Venmo account, open the app, tap your profile icon and tap Settings (gear icon). Select Create Business Profile and follow the prompts.
If you don’t already have a personal Venmo account, you can create a Venmo account and a Venmo business profile at the same time. Here’s how:
The business profile signup process is quick and easy. After completing the above steps, enter the business information Venmo requests:
Venmo can usually verify a business name, address and EIN automatically. If not, Venmo will ask you to send verification documentation.
You should note a few things here:
When deciding if your business should get a Venmo business profile and accept Venmo payments, consider Venmo’s upsides and downsides.
Here’s what makes Venmo for Business such an attractive option for small businesses:
Venmo isn’t for everyone. Here are some downsides to consider:
If you’re a sole proprietor, freelancer, independent contractor or another type of small business, Venmo for Business is likely an excellent choice for a P2P payment method. Similarly, if your business sells to young, tech-savvy people in the 16-to-35 age demographic, Venmo is a natural, easy payment option to offer.
If you are just starting a business and haven’t set up credit card processing yet, Venmo for Business is an excellent option. And if your business already accepts credit cards and other payment options, Venmo for Business may be a welcome addition to your accepted payment methods.
After you’ve set up a Venmo business profile, you can start accepting payments for goods and services. Your customer must have a personal Venmo account. If another business wants to pay you, it will need a Venmo business profile. If you want to pay another business, that business will also need a Venmo business profile.
You can accept Venmo payments from customers via the Venmo app, on your website or in person with a quick response (QR) code. Customers can also use a Venmo debit or credit card to pay a business:
After the transaction, the money is transferred from the customer’s Venmo account to your Venmo account using the customer’s Venmo balance or linked funding source.
When there’s money sitting in your Venmo account, you can use it to make payments with Venmo or transfer the balance to your linked bank account. There is no cost to do this unless you request an instant transfer, which transfers funds within 30 minutes. There is a 1.75 percent fee for an instant transfer.
In Venmo, you can link only one bank account to receive money. You can’t funnel personal payments into your personal checking account and business payments into your business accounts.
However, you do have the option to transfer funds between your personal Venmo account and your business Venmo account. You can keep track of your business’s Venmo sales for small business accounting and tax purposes by looking at a listing of business transactions in your business profile.
Just like credit cards, Venmo charges a fee every time a business transaction is made. For payments made using the Venmo app and a QR code, the fee is 1.9 percent of the total amount plus 10 cents for each transaction made to your business profile. For payments that are contactless but not from a Venmo account, the fee is 2.29 percent plus 10 cents per transaction. The minimum fee per transaction is $1. Venmo deducts any applicable fees before your money arrives in your bank account.
Here are some examples for a purchase made from a Venmo account:
Here are some examples for a contactless purchase not using the customer’s Venmo account:
There are vast differences between payment processors. Check out our reviews of the best credit card processing services to compare fees and features.
Venmo Business transaction limits and bank transfer limits
The maximum transaction amount for a Venmo payment is $999.99. Users also have a total weekly spending limit to Venmo-authorized merchants of $4,999.99 if they verify their accounts. Unverified accounts have a weekly spending limit of $299.99.
For merchants, there is a weekly cap on the amount you can transfer from your business Venmo account to your linked bank account. If your identity has not yet been confirmed, the limit is $999.99 per week; if your identity is confirmed, the limit increases to $19,999.99 per week but in chunks of no more than $2,999.99 for each transfer.
Venmo is only one option for accepting customer payments. Other digital wallets exist that work like Venmo; there are also payment aggregators like PayPal and traditional credit card processors. PayPal owns Venmo, so when you use PayPal for credit card payment processing, you can still accept Venmo and PayPal as well as Apple Pay and Google Pay.
If you’re deciding between Venmo and a credit card processor, note that Venmo’s transaction fees are significantly lower and Venmo charges no monthly or other fees.
Meanwhile, many more people have credit cards than Venmo accounts. If you accept only Venmo and not credit cards, you’ll probably lose sales. However, if your market consists primarily of teens and millennials, this may not be that big of a problem since Venmo use is ubiquitous in those demographics.
Your business can accept credit card payments with PayPal, but you’ll need to get a PayPal Business account, download the PayPal Zettle app and get a PayPal card reader.
Here’s a look at how Venmo compares to other P2P options:
Credit transaction fee
Bank transfer limits
Fund transfer speed
What you should know
1.9 to 2.29 percent + 10 cents per transaction
$19,999.99 per week
Around 1 business day
Most widely used P2P
Up to 4 percent
$5,000 per week
1-3 business days
Can integrate with a POS system and credit card processors
$10,000 per week
1-3 business days
Already installed on iPhones, but available to Apple users only
$7,500 per week
1-2 business days
Can receive payments over Bluetooth
2.9 percent + 30 cents
Up to $60,000 per transfer
1-3 business days
Can also accept credit cards