Good afternoon everyone, I hope your week is going well. Last night, I received an email regarding “New and upcoming changes to Venmo” – a pretty generic looking email with generic looking text that I skimmed through and almost deleted. Buried in the text were 2 changes about seller transaction fees and instant transfer fees. I decided to dig into these changes to see what they really meant for me and other Venmo users. Here are the 2 changes that I researched:
3) Effective July 20, 2021, users who receive payments that are identified by senders as for goods and services will be charged a seller transaction fee of 1.9% + $0.10.
4) Effective August 2, 2021, the fee for instant transfers will be 1.5% per instant transfer ($0.25 minimum fee, $15 maximum fee).
On the Venmo for Business page, it says you get your first month for zero seller transaction fees, but that offer will end in a few days on June 30 and will not be available after that. The fee is currently 1.9% + 10 cents per transaction, but since Venmo is owned by PayPal (and it says that fees may change and other fees may apply), I wouldn’t be surprised to see the fees increase to what PayPal currently charges at 2.9% + 30 cents per transaction down the road.
It is also interesting that the fee applies to users who receive payments to their business profile or when you receive payments that are identified as for goods and services. It sounds like Venmo may start looking at the relationship between Venmo users and the description of the Venmo payment to determine if this is peer to peer payment or a payment for goods and services.
The second change that caught my attention is in regards to instant transfer of funds from your Venmo account to a linked bank account. Currently, the Send & Receive page shows that the fee is 1% with a minimum fee amount of 25 cents, up to a maximum fee amount of $10.
However, if you go to the Instant Transfer FAQ page, it mentions the current fee (1%, min 25 cents, max $10) and also the upcoming fee that goes live on August 2, 2021. That fee will increase to 1.5% with a min of 25 cents and a max of $15.
I am a casual user of Venmo and only use it to pay back friends for dinner or send money for a group gift, so I don’t think either of these changes will affect my experience with Venmo, but if you are a business or look like a business to Venmo, and you routinely transfer large amounts of money to your bank account with the instant transfer, you will surely see your costs increase (and they might continue to increase over the next year or so). If you see any other changes that affect you, please let me know. If you have any questions about any of the new Venmo changes, please leave a comment below. Have a great day everyone!
Do you understand that ‘like paypal’ the sender will pay a fee if the selller doesn’t?
Hi Michelle, I do not have a business Venmo account, but I assume the seller / receiver of a goods and services payment would pay the fee (deducted from the funds received).
Cash is king. Venmo is convenient but if I was to pay fees in addition to state and federal taxes, I’d rather just be paid in cold hard cash.
Also, “goods and services” is a very broad term and covers almost everything. It also doesn’t sound like it’s limited to business account as I don’t have a business and got the email. It sounds like if I was to describe my payment as something like “Payment for buying used washing machine $150,” then Venmo would see this as payment for good and services.
Yes, it will be interesting to see if Venmo would “read” that description, decide it is about goods and services, and charge you a fee. I tend to only put emojis in the Venmo description, so I wonder if that would bypass this screening.