If you are a freelancer, small business, or individual that sells goods and services on Venmo, you will soon be faced with new fees. Being a small business is hard enough and getting charged more fees isn’t ideal when collecting payments. The good news is that there are plenty of Venmo alternatives out there. You get the benefit of shopping around for an option that works the best for you and your clients.
What are the new Venmo fees?
Venmo just announced they will require sellers who have personal accounts to document sales and add a “goods and services” tag that will set business payments apart from personal transactions. As of July 20, 2021, Users who identify themselves as businesses will be charged 1.9% plus a $0.10 transfer fee for any money sent to them. However, there isn’t just one transaction fee involved here. On August 2, 2021 Venmo is set to charge 1.5% per instant transfer from Venmo to a bank account with a 25 cent minimum fee and $15 maximum fee. Get informed about Venmo’s fees here.
Before we dig into alternative Venmo options, we need to understand different fee types
There are different types of payment methods for clients to use when buying a product. They can pay via credit card, debit card, or directly from a bank account. The majority of payment companies, digital wallets, and financial institutions charge fees with both debit card and credit card transactions. They typically charge between .8%-2.9% for debit cards and between 2.9%-4% for credit cards. Now if a client sends money directly from their bank account, like Google Pay, then there aren’t any fees involved.
Those fees add up when you are a small business, so let’s take a look at some trusted Venmo alternatives.
Our recommended online payment systems
Bloom is a great payment option for small business transactions and collecting mobile payments on the go, all while maintaining a professional brand. When you sign up for a Bloom account you get your own business hub with the ability to create custom booking pages, invoices, and automated processes that clients can send payments through. Bloom integrates with Stripe and Square which charge low ACH fees and allow your clients to make payments directly from their bank accounts.
Bloom doesn’t charge anything for ACH payments, however, Stripe has a .8% debit card transaction fee with a maximum fee of $5. Stripe has the lowest ACH fees compared to the other 6 online payment methods listed. Noting that ACH transactions are not immediate and may take up to 3-5 business days to transfer. Stripe also has a limit of up to $25k per transaction.
On the other hand, Square’s standard processing fee is 2.6% with a $0.10 charge for contactless payments, inserted or swiped chip cards, and swiped magstripe cards. If a client uses a virtual terminal there is a 3.5% fee with a $0.15 fee for every transaction made. Learn more about the different benefits of Square and Stripe here.
With Bloom, when a client receives your branded invoice they can go into their personal portal to review their details and seamlessly pay. You can try Bloom’s 14-day FREE trial here and start building your client’s branded experience.
Wait, what are ACH fees?
An ACH transfer is the electronic movement of money between the Automated Clearing House network. ACH transfers include person-to-person payments, bill payments, business-to-business, and external funds transfers. Banks, Zelle, and third-party apps like Venmo and Paypal, use the ACH network. ACH debit transactions involve money being “pulled” from an account and ACH credit transactions let your “push” money online into accounts. These accounts can either be owned by banks, personal accounts, or family/friend’s accounts.
Paypal is a great payment solution for freelancers and gives you the ability to receive payments instantly with your own personalized link. You can share it with your clients via text, email, or favorite messaging app to get paid. However, Paypal charges 2.9% debit card fee, plus a flat fee of 30 cents if the funds come from the United States. If there is an international transaction the fee increases to 4.4% plus a flat fee based on the currency. If you process at least $3,000 per month, you may apply for a Paypal merchant rate which would reduce your processing fees.
Paypal actually acquired Venmo back in 2013 and has slowly started to expand its features. Compared to other payment services Paypal’s online transaction has higher fees and they aren’t as flexible with different currencies.
WePay was launched as a direct competitor of Paypal by JPMorgan Chase Company and is perfect if you run an ecommerce site or accept payments online. They integrate easily with websites and the payment processor was created specifically for Saas companies and ecommerce sites. Just like other payment providers, WePay charges a 2.9% and $0.30 fee per credit card transaction. They also accept ACH payments for a 1% and $0.30 fee per transaction. However, there are no monthly costs or account management costs to use WePay. One downfall is that their support team is only available via email.
Zelle is a peer-to-peer payment method similar to Venmo and Paypal, but has a slightly smaller processing fee compared to Paypal. Zelle charges a 2.5% of the transaction amount compared to Paypal’s 2.9% processing fee and $0.30 per transaction. The benefit to using Zelle is how easy it is to share your information with clients. The client would either have to download the app or send the funds through their bank account but they are able to send funds using an email or phone number. The funds post quicker since they are able to connect directly to a bank account. As a small business, Zelle is a more secure option as you don’t have to share your bank account information with clients. If you are just starting out on your freelancing journey Zelle is a solid option for your first transactions.
5. Google Pay
Google Pay is similar to other mobile payments but is unique with its integration with other Google products. You can send money to someone by e-mail and if you have a Google account you are essentially already signed up for Google Pay. There are currently no fees whether you are a business or a consumer when money is transferred via bank account. If clients choose to pay with a credit card there will be a 2.9% fee associated with the purchase.
In 2011, Google Wallet was Google’s first payment service but the product didn’t catch traction due to only having peer-to-peer payment types and existing on iphones. Thus, Google created Google Pay to allow users to shop online or make in-store purchases with their mobile devices.
Choosing which Venmo Alternative app is for you
Running a business is hard enough and being charged high transaction fees is not ideal. Each of these 5 Venmo alternatives are great options that will benefit you and your business in different ways. Choosing an easy payment method that provides a seamless, and most importantly, positive transaction method is key. We have all been there where you are excited to purchase a product or service and checking out isn’t easy so you leave the items in the cart.
So go checkout these different platforms and see which one is for you!
Learn more about Bloom with their 14 day FREE trial.
Venmo Alternatives FAQs
Is there a better app than Venmo?
While “better” is subjective, there are several good alternative payment apps to Venmo. For instance, Apple offers Apple Pay for iPhone users, which integrates seamlessly with the iOS ecosystem. Additionally, many alternatives provide tools like spending views or even a free version with competitive starting prices. Choosing the best app often depends on individual needs and device compatibility, like Android or iPhone.
Who is Venmo’s biggest competitor?
Venmo’s biggest competitor is arguably Cash App. It offers similar tools for sending and receiving cash, with added features like a free debit card. Its security features, domestic sending limits, and user experience make it a popular alternative. Both apps have a strong presence on platforms like Android and iPhone.
What’s safer than Venmo?
Safety can vary between payment apps based on data security protocols, insured balances, and user practices. While Venmo is FDIC insured under certain conditions, apps like Apple Pay emphasize data encryption and biometric security. Reading and understanding each app’s security details and ensuring you’re wired into their latest updates is essential for a safer experience.
How do I pay someone without Venmo?
There are numerous alternatives for sending cash without using Venmo. Options include Cash App, which is widely used for domestic transfers, and Apple Pay for iPhone users. Android users might opt for Google Pay. Each app has different sending and spending limits, so it’s crucial to read and view the terms before choosing your preferred payment method.