Business.com aims to help business owners make informed decisions to support and grow their companies. We research and recommend products and services suitable for various business types, investing thousands of hours each year in this process.
As a business, we need to generate revenue to sustain our content. We have financial relationships with some companies we cover, earning commissions when readers purchase from our partners or share information about their needs. These relationships do not dictate our advice and recommendations. Our editorial team independently evaluates and recommends products and services based on their research and expertise. Learn more about our process and partners here.
Venmo for Business: Is It Right for You?
Learn the pros and cons of accepting Venmo at your small business.
Table of Contents
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, thus eliminating the need to fumble with a purse or wallet to retrieve a credit card. Contactless payments also make checkout faster, which benefits both customers and businesses.
If younger people constitute a significant portion of your customer base, you have a new business or you want to add payment options for your small business, here’s what you need to know about Venmo for Business.
What is Venmo, and how does it work?
Understanding how the core Venmo service works is essential when you’re considering using Venmo for Business. Venmo is one of the most popular P2P payment services, with more than 92 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 will 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 can 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% fee.
What is Venmo for Business?
While Generation Z and millennials make up 66% of Venmo’s user base, the next natural step is to use Venmo to pay companies for goods or services.
Venmo for Business, which launched in 2021, lets small businesses create business profiles that allow them to accept Venmo as a digital payment method. Since Venmo for Business’ launch, more than 2 million merchants have signed on to accept Venmo for payments.
How to get started with Venmo for Business
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.
1. Add a business profile to an existing Venmo account.
If you already have a personal Venmo account, open the app, tap your profile icon and tap Settings (the gear icon). Select Create Business Profile, and follow the prompts.
Photo credit: Venmo
2. Create a Venmo account and business profile at the same time.
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:
- Download the Venmo app, and choose the Business option.
- Tap Sign Up.
- On the next screen, choose Get Started.
- Type in your mobile number, and tap Send Code.
- Enter the four-digit code you receive from Venmo to verify your phone number, and tap Submit Code.
- Enter your name and email address.
- Create a password.
- Tap Agree.
3. Complete your business profile application and get verified.
The business profile sign-up process is quick and easy. After you complete the above steps, enter the following business information:
- Your employer identification number (EIN) or Social Security number (use an EIN if you’re a partnership or corporation)
- A business name to display and a username
- A short description of your business and business category
- Business address (this won’t be displayed)
- Optional public business information, such as a customer-facing business address and phone number and social media profiles
Venmo can usually verify a business’s name, address and EIN automatically. If not, Venmo will ask you to send verification documentation.
You should note a few things here:
- If you’re not verified automatically, you can start using your business profile. However, there will be limitations on your bank account transfers.
- You’ll log in to both your personal Venmo account and your business profile using your personal account’s credentials.
- You can create only one business profile.
- Venmo and Venmo for Business are currently available only to U.S. residents with U.S. bank accounts.
Pros and cons of using Venmo for Business
When you’re deciding if your business should get a Venmo business profile and accept Venmo payments, consider these upsides and downsides.
Venmo for Business pros
For many small businesses, Venmo offers a simple and cost-effective way to accept payments.
“I’ve found it a convenient backup option,” said Shelly Allhands, a managing director at Evergreen Communications LLC and the owner of Violet’s Fudge. “There have been instances when a customer didn’t have another card and was pleasantly surprised that I accepted Venmo. It simplifies the process by automatically tracking items and customer names and depositing payments directly into my bank account.”
Here’s what makes Venmo for Business such an attractive option for small businesses:
- It has low transaction fees.
- There are no additional fees.
- The setup is quick and easy.
- There’s no need to get approved.
- No credit check is required.
- New businesses can get started right away.
- Venmo is one of the most popular P2P apps.
- You can quickly transfer funds to a bank account.
- It’s available on Apple, Android and other mobile platforms.
- It allows for payments on the go.
- The social feed gives your business free marketing.
- It enables contactless payments.
- You can manually create and apply sales tax rates, if states require it.
Venmo for Business cons
Although Venmo can be a convenient payment option, it does come with some drawbacks for businesses.
“Venmo has a slightly less professional feel than Square payments,” Allhands said. “For me, this is mainly because of its social-media-like interface and the ability for others to see your transactions.”
Here are some additional downsides to consider:
- It’s not widely used among people over age 35.
- You may miss out on sales from credit card users.
- Transfer limits make it unsuitable for high-volume businesses.
- It does not automatically include tax calculations.
- You can’t set up more than one business.
- Funds mix in a single Venmo account, so it demands more accounting attention.
- It’s limited to one person, with no option for co-owners.
Who is the ideal Venmo for Business company?
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.
Venmo vs. alternative payment options
Here’s a look at how Venmo compares with other P2P options:
Payment service | Credit transaction fee | Bank transfer limits | Fund transfer speed | What you should know |
|---|---|---|---|---|
Venmo | 1.9% to 2.29% plus $0.10 per transaction | $19,999.99 per week | Around one business day, but it can take up to three business days | One of the most widely used P2P options |
Google Pay | Up to 4% | $5,000 per week | One to five business days | Can integrate with a POS system and credit card processors |
Apple Pay | None | $10,000 per week | One to three business days | Already installed on iPhones, but available only to Apple users |
Cash App | 2.75% | $10,000 per week | One to three business days | Can be used on iOS and Android |
PayPal | 2.99% plus $0.49 | Up to $60,000 per transfer | One to three business days | Can also accept credit cards |
Venmo FAQs
- Paying via the Venmo app: If a customer pays you via the Venmo app, they'll select your business, input the transaction amount and tap Send. If necessary, they can use Venmo's search function to find your business; make sure they tap the Business category (as opposed to People) to ensure they're searching businesses.
- Paying via your business website or mobile app: Customers can also use Venmo on your business website or mobile app if they make an online purchase and you've set up Venmo as a payment option. In this case, they'll log in to their Venmo account when completing the purchase. To use Venmo as a payment option on your website or app, you must integrate a Pay With Venmo button via a payment platform such as Braintree or PayPal. You must set up an account with whatever payment platform you choose; you'll likely need a web developer to integrate the payment button into your website or app.
- Paying in person with a QR code: It's easy to accept customer payments in person by having them scan your Venmo business profile QR code. Customers can scan the code from a smartphone or tablet screen, or you can opt to print the code. Venmo offers business customers a QR kit to make it easier to accept QR code payments. Venmo's free QR kit includes five stickers, a wallet card with a lanyard, and a tabletop display with a stand. Your first kit is free; additional ones cost $14.99. After Venmo activates your QR kit, customers can scan the code to be taken directly to your Venmo business profile.
- $100 purchase: $100 x 1.9% = $1.90 + $0.10 = $2 fee
- $40 purchase: $40 x 1.9% = $0.76 + $0.10 = $0.86, rounded up to the minimum $1 fee
- $100 purchase: $100 x 2.29% = $2.29 + $0.10 = $2.39 fee
- $10 purchase: $10 x 2.29% = $0.23 + $0.10 = $0.33, rounded up to the minimum $1 fee
Amanda Hoffman contributed to this article.
