How Does Venmo Make Money? 

Here Are 8 Ways

Did you know Venmo comes from the Latin word vendere, which means “to sell” – or that it was once a music start-up where you could text bands to receive MP3s via email?

Yet those details, interesting as they might be, aren’t what we will discuss today. Instead, we’ll look at other sides to Venmo that could save you sizeable sums of money as you continue using the app.

While Venmo may appear to be a free service, it can be pretty expensive if you don’t understand how it works as a business. So, how exactly does Venmo make money from its customers? Let’s find out.

As we’ve seen, you can send money, receive money, and make standard payments using Venmo at no cost. However, that changes when you use a credit card rather than your debit card or checking account. In these scenarios, you’d pay a 3% processing fee on the transaction.

Credit Card Purchase

While it’s free for the user, Venmo charges the merchant 1.9% of the purchase price, plus a flat $0.10 fee on every transaction.

Pay-With-Venmo Transactions

Instant Transfers

Standard withdrawals don’t cost a cent, but Venmo takes 1.75% of anything you send via Instant Transfer. So you’ll pay a minimum of $0.25 per transfer but no more than $25.

If the ATM you withdraw money from is not in the MoneyPass network, then you’ll pay $2.50 (alongside whatever the ATM owner wants to charge). There’s no fee if it’s “in-network.” Venmo users also pay $3 for an over-the-counter cash withdrawal at a bank or other financial institution.

Withdrawal Fees

Cashback Program

Everyone’s a winner. Users get cashback, the merchants boost their sales, and Venmo generates extra revenue. So how does Venmo make money? By teaming up with a company called Dosh (an automatic cashback platform) that pays it a referral commission.

Swipe up to learn more!