Venmo Credit Card Processing 2023: Reviews & Complaints

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Company Overview

Venmo is a personal cash transfer service owned by Braintree Payments and PayPal. Launched in June 2012, the service enables users to make direct bank (ACH) transfers or card payments to one another using a mobile phone app. Bank and debit transfers are free through Venmo, but the service charges a per-transaction fee on credit card payments. Additionally, as of 2021, Venmo has added a feature that allows a buyer to flag a purchase as “goods and services,” which will allow the buyer to enroll in a purchase protection plan and which adds a charge of 1.9% to the seller’s end of the transaction. Venmo is similar in many ways to Square Cash or PayPal, but its easy-to-use app and free transfer service make it one of the best mobile apps for sending money to people. Venmo has also recently launched a feature that enables businesses to accept payment from Venmo users within those businesses’ mobile apps, and users can now pay with Venmo in places that have a PayPal button.

Additionally, it became news in 2022 that Venmo (along with other online payment processors) must report transactions to the IRS if someone sends over $600 a year. This may heavily affect those using Venmo for business.

Is Venmo Holding Your Funds Right Now?

Thousands of users have had their payments frozen by Venmo. If you’re one of them, then you might find these resources helpful:

Venmo Payment Processing

The process for sending funds through Venmo is simple. First, the user opens the app using either a biometric scan or PIN and enters the username, phone number, email address, or Twitter handle of the person they wish to pay or charge. The user then specifies the type of transaction via a Pay/Request button. Then, the user enters the amount to be paid or charged and provides a brief note describing the transfer (similar to the “Memo” line on a paper check). After the user initiates the payment, the money is sent, and confirmation is sent via email to both parties. As with its parent company PayPal, Venmo users will need to manually transfer the Venmo funds from the app to their personal bank accounts in order to withdraw them as cash.

Venmo is available for iPhone and Android, and the service may also be accessed through the company’s website.

Location & Ownership

Andrew Kortina and Iqram Magdon-Ismail are listed as the co-founders of Venmo, whose headquarters are located at 159 W 25th St, Fl 9 New York City, NY 10001 while other sources list it at 95 Morton St, Fl 5, New York City, New York, 10014. It also lists 2211 N 1st St, San Jose, CA 95131 as a headquarter location on its Better Business Bureau profile, though this appears to be a PayPal office. Dan Schulman is the president of Venmo.

Venmo Comparisons

Many merchants find themselves debating between Venmo and PayPal for their payment service needs. We welcome our readers to check out the PayPal vs Venmo section of our PayPal review.

Table of Contents

Venmo Customer Reviews

Here's What Their Clients Say

Key Points

Total Online Complaints 1,000+
Live Customer Support Yes
Most Common Complaint Fund Holds

Frozen Funds a Major Issue

We have found more than 1,000 negative Venmo reviews on various consumer protection websites, some of which accuse the company of being a scam. The vast majority of complaints are related to sudden, unexpected fund-holds placed on users’ Venmo accounts, typically as a result of payment activity that Venmo flagged as fraudulent. In many cases, it is clear that users did not understand that their funds could be held, or that they engaged in prohibited transactions in defiance of Venmo’s terms of use. While we don’t fault Venmo for taking steps to prevent fraud in its system, it does seem that users could be made more aware of why Venmo holds funds before they start using the service.

Other Venmo Complaints

To a smaller degree, other users claim that their payments were lost or delayed as a result of account setup errors or unauthorized use of their account. Venmo is intended primarily for personal use in its current form, so users should not try to conduct large-scale or regular business transactions through the personal app. Other complaints include annoyance with the app’s social media integration and isolated customer service issues. Venmo offers phone and email support to all users, but it is likely that these customer service lines are managed by either Braintree or PayPal.

Venmo Lawsuits and Fines

In March of 2018, Venmo settled an FTC complaint brought against them alleging that the company failed to disclose material information about the availability of consumers’ funds. In addition, the lawsuit challenges aspects of the company’s privacy and security practices. The proposed settlement requires Venmo to make clear disclosures about certain business practices.

In 2021, the Consumer Finance Protection Bureau announced an investigation into Venmo’s collection practices. According to the Wall Street Journal, “The company has threatened to dispatch debt collectors on users who overdraw their accounts, even when those users are victims of scams.” We will update this review as the investigation’s findings are reported.

2022 saw a class-action suit for $58 million brought against Venmo backer Plaid. This suit was brought due to alleged information collection that went against the law.

Venmo Customer Service Options

The Venmo website lists dedicated phone and email contact information for customer support. Given the fact that the company is showing complaints regarding its customer service, especially with resolving fund-holds, we have given it a “B” in this section and must exclude it from our list of the top merchant account providers for customer service.

We have located a single Venmo customer service phone number:

(855) 812-4430 – Toll-Free Customer Service

Venmo also offers live chat and a customer support form on its website as well as a customer service email address at [email protected]

Venmo Online Ratings

Here's How They Rate Online

Online Ratings Summary

Product & Service Complaints 2,059
Billing & Collection Complaints 607
Advertising & Sales Complaints 27
Guarantee & Warranty Complaints 5
Delivery Complaints 71

Note: We have adjusted this company’s BBB rating according to our own standards. To better understand why we adjust BBB ratings, please see our Rating Criteria.

More Than 2,700 Complaints

An accredited business with the BBB since 2016, Venmo has an “A” rating from the Better Business Bureau and has received 2,768  total complaints in the past three years. This is a major uptick from the 1,279 at the time of a recent review and is cause for concern. 2,059 of the complaints were due to a problem with a product or service, 607 were billing or collections issues, 27 were due to advertising or sales problems, 5 were issues with a guarantee or warranty, and 71 were issues with delivery. Only 1,434 of these 2,769 complaints were resolved by the company to the satisfaction of the merchant. The remaining 1,335 were resolved to the dissatisfaction of the merchant or received no final response. According to the details of most of these complaints, many of the complainants attempted to use Venmo for business transactions and found that their accounts were frozen as a result.

What Users Say

Venmo has also received 351 informal reviews from users, with only 2 reviews being positive in tone. Again, this is a large increase from the 172 reviews at the time of a recent post. One recent complaint comes from a user who had their funds held:

Venmo froze my acct with all my money in it That money is meant to pay the attorney and to travel to save my 4 year old from an abusive father. Venmo said it will take 4 to 5 business days to unfreeze the acct. Venmo’s incompetence and lack of caring may have a negative impact on my sons life. Highly recommend to not trust your money with them. Stay away. I would have given them negative stars but that is not an option

Customer service is an important component of any merchant account provider. However, Venmo primarily serves peer-to-peer monetary transactions. This review makes it difficult to gauge the quality of Venmo’s customer service for merchants.

A “C” Performance Overall

Although Venmo has seen a large increase in BBB complaints over the last year, it has also grown in popularity by a comparable amount. Furthermore, many complainants appear to be in violation of Venmo’s terms of agreement by their own admission. Even taking these factors into account, it is hard to ignore the negative trend on Venmo’s BBB page. In light of the company’s complaint total and resolution ratio, we have adjusted the BBB’s rating to a “C” for our purposes.

Venmo Fees, Rates & Costs

A Closer Look at The Contract

Key Points

Debit/Bank Transfer Rate Free
Credit Card Transfer Rate 3%
Early Termination Fee None
PCI Compliance Fee None
Equipment Lease Terms None

Debit Is Free, But Credit Costs 3%

Venmo is simple to install and use, and it allows users to send debit payments to one another for free (credit card payments cost 3%). It processes transactions within one business day, and it enables users to maintain a Venmo Balance if they’d prefer not to cash out their funds immediately after receiving them. Venmo is available to anyone, and its mobile app is compatible with most modern smartphones. The initial processing limit on Venmo payments for an unverified user is $299.99 per week, but this can be increased to $2,999.99 per week if the user provides either the last four digits of their SSN or an attached Facebook account. Overall, the app is exceedingly simple to use and free for most payment types, though it should again be noted that the new “goods and services” tag can result in a 1.9% fee on the receiver’s end.

Businesses Pay Braintree’s Rates

Venmo’s business pricing is the same as Braintree’s Discover-card pricing, which varies depending on the merchant’s business type. The company’s business program does not charge any monthly or annual fees, although its enterprise pricing could possibly include additional fees in some cases. Venmo for business is currently only available to merchants who have a mobile e-commerce website or a mobile app for iOS or Android and who wish to accept phone payments from Venmo users. This relatively advanced feature helps Venmo and Braintree compete with other payment processors for web developers.

Instant Transfers

While Venmo can take 1 to 3 business days to transfer money from its app to a bank account for free, the company also has an instant transfer option. This allows merchants and other users to instantaneously their funds. However, a 1% fee is attached to these transfers, with a minimum of $0.25 and a maximum of $10.

Only As Secure As You Make It

Although Venmo encrypts payments and processes them on its own secure servers, the app is technically only as secure as a user’s phone and Venmo PIN. As a precaution against theft, Venmo allows users to remotely deactivate their accounts on devices that they believe to be compromised. The app’s processing limits also restrict potential damages to either $299.99 or $2,999.99 for a fraudulent transaction.

Fund-Holds Are a Real Risk

Some users report issues with Venmo’s hold policies, claiming that the company holds uncommonly large transactions or shuts down accounts without sufficient explanation. Venmo users should be sure to read and understand all hold policies and prohibited uses for the app before sending large amounts through it.

We also encourage merchants to check out our list of the providers of the best merchant accounts.

Venmo Employee Reviews & Sales Tacitcs

Should You Work For Them?

Key Points

Employs Independent Resellers No
Advertises Deceptive Rates No
Discloses All Important Terms Yes

Full Disclosure

Venmo currently markets itself through conventional advertising and via PayPal/Braintree’s vast network of users. The service does not charge its users to send debit payments or direct bank transfers, and it makes its 3% fee for credit card payments clear on its website. Venmo also explains on its website that business users will receive Braintree’s per-transaction pricing, which is competitive when compared to other top merchant accounts for e-commerce. Venmo’s pricing model leaves little room for misleading rate quotes or hidden fees, and there are no complaints about the way the company markets itself at this time.

This compares favorably to our list of best credit card processors.

Our Venmo Review Summary

Our Final Thoughts

Simple and Free, But Not Perfect

Considering its low cost, easy installation, widespread compatibility, short transfer time, and generally positive reviews, Venmo is a clear frontrunner among peer-to-peer payment services. The service’s only potential security issues are limited to instances of device theft, and Venmo can remotely disable an account at a user’s request. Venmo has seen increased complaints related to fund-holds and frozen accounts, but many of these complaints appear to be filed by people who knowingly misused the app. Venmo is not intended as a way for businesses to accept in-person payments at this time, but the company is said to be investigating possibilities for launching a POS system for retail businesses.

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Your Comments & Reviews

How Did Venmo Treat You?

232 Responses

  • Absolute worst mobile banking service in existence. Customer service is pathetically inept. Froze my account with ZERO notice. No email, no call, no push notification. Nothing. Customer service will not help you. They gave me a different answer several times and one agent was purposefully rude and passive aggressive. Do not use this service. It is is pathetic.

  • Magdalene Jacobson

    Deceptive Practices and Misinformation by Venmo and Synchrony Bank – Proceed with Caution.

    My recent experience with Venmo and Synchrony Bank has left me utterly frustrated and disappointed. Both companies have shown a complete lack of transparency, misleading practices, and a disregard for customer satisfaction.

    The primary issue arose when I attempted to deposit funds onto my Venmo credit card. Despite being assured that the process would take 1-3 business days, my money seemed to vanish into thin air. The balance on my Venmo credit card remained unchanged well beyond the promised timeframe, leaving me feeling cheated and taken advantage of.

    What’s worse is that Venmo failed to adequately disclose the potential risks associated with these deposit transactions. Nowhere in their terms or during the transaction did they bother to mention that deposits could be subjected to review, leading to potential freezing or removal of funds. This is a blatant breach of trust and a demonstration of their willingness to manipulate their customers’ hard-earned money without proper warning.

    In a world where financial transactions should be seamless and straightforward, the behavior of Venmo and Synchrony Bank is inexcusable. I strongly advise against using their services, as they have shown a blatant disregard for their customers’ well-being and financial security. Seek out more reputable and transparent alternatives that actually value their customers and provide honest, accurate information. Don’t fall victim to the misleading tactics employed by these companies; your hard-earned money deserves better treatment than this.

  • Venmo customer service has been a complete joke. I had to file 4 disputes for unauthorized charges back in 11/2022, They are “still under review”, when I call customer service or chat they all tell me different things, not to mention the automated emails they send, and when you try to respond to them they don’t respond back. I finally had one dispute resolved in my favor on 2/20/23 and I have yet to see my money, they say the money was sent to a account that has been closed (was compramised) and they say to reach out to the card issuer, however they have no idea what I am asking because I have not account there anymore. So now its been a month, no money, and Venmo can not find where it its.

  • Bob

    Bobs Bun Bakers

    Venmo/Paypal are both horrible. I’ve used paypal since the early 2000’s, but will never use it again. Venmo is a complete joke. Sure, you can use it to pay people, or get paid, but anything else? Not a chance. They charge outrageous fees and if you buy crypto, won’t let you do anything with it except ‘hold’ it. WTF sense does this make? They charge a fee to buy crypto, charge a fee to sell crypto, but don’t allow the use of crypto for anything. What kind of joke is this company?

  • Erin Schuelke

    U Been Framed

    Venmo is not to be trusted. They stole over $2000 out of my account and it’s been months. I’ll never see the $. I was told an account specialist will contact me over and over again. There is no account specialist. The customer support number is based in the Philippines with agents who barely speak English but can read scripts. I’ve had transactions sent to my account when frozen that are unexpected. I contact Venmo and they don’t correct it. They’ll add the $ to my account then take it away immediately. I’m done. Filing a small claims suit in my local courthouse. They’re a fraudulent company stealing millions of dollars from their customers. I’m not going to sit back and allow it to happen and not have 1 response from their corporate management team. Please help me.

  • I tried to resolve an issue with Venmo and disputing accounts which I had authorized. I called and spoke with the manager and he told me it had to be escalated with an email response. I told the manager I wanted to speak with someone and not try to resolve the issue through email. He then hung up on me. I’m never using Venmo again.

  • Andrew Rogers

    I am new to Venmo, and I already don’t like it. I am trying to make a payment to something setup in Venmo. I can see where other people have made payments, but Venmo won’t let my payment go through the process. I have tried using credit cards and debit card to no avail. I spoke to their customer service, and they said it is their security algorithm saying there was a risk involved with the payment. They said my account was fine and my cards were good; it was just their system. I asked how if there was nothing wrong with my stuff and they had already allowed others to make payments to what I was sending the money…how could there be a risk? They kept coming back to wanting me to enter my bank account information. If I have legitimate credit cards, they don’t need my bank account information. They said without my bank information, that all I could do was keep trying to make the payment and it could take anywhere from a couple of hours to maybe never for it to go through.

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