Venmo Credit Card Processing 2023: Reviews & Complaints
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:
- How To Make Your Payment Processor Release Your Money
- Best Mobile Apps for Sending Money
- Best Mobile Credit Card Processing Apps
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.
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
|Total Online Complaints||1,000+|
|Live Customer Support||Yes|
|Most Common Complaint||Fund Holds|
Frozen Funds a Major Issue
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|
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
|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.
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?
|Employs Independent Resellers||No|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||Yes|
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.
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