Peer to peer payment (P2P) is a very popular way between friends and family members to pay each other. It allows the transfer of funds between two parties using their individual banking accounts or credit cards through an online or mobile app.
With popular cash transfer apps like Venmo and PayPal, sending and receiving funds is as easy as the tap of a button on your mobile phone. If you continue reading below, you can see how each apps are similar and how their services differ.
How does Venmo work?
Venmo is a mobile payment app that lets you send and request money from anyone with a Venmo account.
All you have to do is sign up, then link your credit card, debit card, or checking account to your Venmo account. The funds you receive can either go straight into your bank account or be saved on your Venmo balance to be used for later
Is Venmo safe to use?
All Venmo transactions are encrypted for security, but still be cautious about who you’re sending money to and why. It’s designed to send and receive money to someone you know, however if you’re transferring funds to someone you don’t know well, maybe you should consider using an alternative method of payment like a money order or credit card.
How to withdraw money out of Venmo
You can easily cash out your Venmo balance by an ATM withdrawal using the Venmo card or a bank transfer to one of your linked accounts.
What is Paypal?
PayPal operates a worldwide online payments system that supports online money transfers and serves as an electronic alternative to traditional paper methods like checks and money orders.
All you need to do is sign up for a new account providing your name, mailing address and an email address, plus a savings or checking account number or your credit card information.
Venmo vs Paypal
|Payment/transfer methods||Venmo funds; credit card, debit card and bank transfers||PayPal funds; credit card, debit card and bank transfers|
|Fees for sending money using bank transfer or your account balance||Free||Free|
|Credit card transaction fees||3% fee||2.9% fee plus $0.30 per transaction|
|Debit card transaction fees||Free||2.9% fee plus $0.30 per transaction|
|Transaction limits||$299.99 weekly transaction limit unless you provide further personal information||No weekly transaction limits for verified accounts, though single transactions might be capped at $10,000|
|Bank account transfer times||By the next business day||By the next business day|
|ATM withdrawal fees||Free MoneyPass network withdrawals and $2.50 for out-of-network withdrawals||Free MoneyPass network withdrawals and $2.50 for international and out-of-network withdrawals|
|Cash reload on card||No||Yes|
|Security||Data encryption||Data encryption|
P2P payments are all about ease-of-use, convenience, speed efficiency, but which is better: Venmo or Paypal?
- For a simple money transfer service, Venmo is a good app that lets you send and receive money between people you know like your friends and family.
- However, if you’re looking for more flexibility, Paypal is a good choice. You can choose to send money to and receive money from businesses and individuals in most countries, even if you don’t have a personal relationship with them. However, you make sure to be cautious when you do so.