Venmo transaction fees: What are they and how to reduce them?

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With nearly 90 million users, Venmo provides a simple way of making cash payments for a variety of situations. Whether you use it to lend someone money, split the bill for a meal or pay back a friend, Venmo is a convenient way to do so. But like many other services, this app isn’t entirely free, and the Venmo fees can deplete your funds if you’re not careful.

In this post, we teach you about how Venmo fees work, how you can save money on fees and how to safely use the app. By minimizing the cost of using Venmo, you have more money to spend shopping, paying bills or investing.

Key takeaways: 

• Venmo charges between $0.25 and $25 in fees for instant transfers and instant electronic funds withdrawals.
• The app charges three percent of the total sent when using a credit card.
• Venmo charges flat fees when buying and selling cryptocurrencies up to $200 and a percentage of amounts over $200.
• Users can save on Venmo fees by using their bank account and avoiding the “instant” features.

What fees does Venmo charge?

Many new users ask, “Is Venmo free?” so it’s helpful to understand how the platform works. When you set up your Venmo account, you can use your bank account, debit cards, credit cards and your personal Venmo funds. As you use the app’s different services, you’ll incur fees like the Venmo instant transfer fee. Some of the fees include: 

• Instant transfers: 1.75 percent of the amount transferred with a minimum of $0.25 and a maximum of $25
• Credit card transfers: Three percent when sending someone money with a credit card
• Instant electronic funds withdrawal: 1.75 percent of the amount transferred with a minimum of $0.25 and a maximum of $25

Fortunately, when you do a standard electronic withdrawal of funds, there’s no charge. 

There are also Venmo fees for businesses that use the app for sales. There’s a seller transaction fee of 1.9 percent of the payment total plus $0.10. Businesses also have the option for contactless payments from iPhones and Android devices. These fees are at a rate of 2.29 percent of the payment total plus $0.10.

Venmo fees for cryptocurrencies

Many different payment platforms are allowing for cryptocurrency transfers, and Venmo is no exception. As of 2024, the app supports the following cryptocurrencies: 

• Bitcoin
• Ethereum
• Litecoin
• Bitcoin Cash
• PYUSD

Venmo charges fees for cryptocurrency transfers based on the amount being bought or sold.

3 ways to save on Venmo transfer fees

If you use Venmo regularly, it’s easy to accumulate fees without realizing how much you’re spending. The fees are small, but regular use over time can cost you a bit of money.  There are some simple ways to minimize these fees so you can use the money for other things, like putting it away in a savings account. Below, we have three simple ways to save on Venmo fees.

1. Use your debit card or bank account

At three percent, the highest Venmo transaction fee is for credit cards. To avoid paying this higher fee, you should use your credit card sparingly. Using your bank account or a debit card means the Venmo charges are only at 1.75 percent. You can also load money to your personal Venmo balance for a lower fee.

2. Minimize the use of instant transfers

The Venmo fees to cash out are 1.75 percent of the total amount transferred when using the instant transfer option. This charge is for the convenience of the speed, but you can do it for free if you can wait a few days. The standard transfer takes one to three business days and has no fees.

3. Choose the “in 10 days” option

Venmo has a feature to cash checks, and similar to instant transfers, cashing your check instantly has a fee. They have an “in minutes” option that’s similar to a cash advance, and this charges between one and five percent with a five-dollar minimum. Choosing the option to receive the money in 10 days allows you to cash the check at no charge.

How does Venmo make money?

Venmo’s primary revenue sources are the peer-to-peer transaction fees and the fees they charge merchants. Venmo states they have over 90 million active customer accounts and 2 million merchants that use the platform. Each customer transaction charges a minimum of $0.25, and merchants pay 1.9 percent plus $0.10 per transaction. 

Venmo also offers its own credit card. Like other credit card companies, Venmo makes money from charging interest. Their other source of revenue comes from integrating with other apps like Uber, which allows users to pay for rides or food delivery with their Venmo account.

Is Venmo safe?

Similar to any fintech app, it’s important to keep your Venmo account as secure as possible. If you’re hacked or your password is leaked, someone could access your Venmo account. Fortunately, Venmo offers two-factor authentication, which gives you some protection against identity theft.

Another risk is that Venmo isn’t insured by the FDIC, which means that if Venmo were to not have your funds available, the government wouldn’t back those funds. To avoid the possibility of not receiving your funds from Venmo, you can keep little or no money in your Venmo account. Alternatively, you can simply pull funds from your bank account, which is more likely to have FDIC insurance.

How saving money on Venmo fees may help you improve your credit score

When you save money on Venmo fees, it opens up opportunities to use your money to build your financial future. Your credit score is an integral part of your financial health, and with the money you save, you can pay down some of your debts. Your amounts owed are worth 30 percent of your credit score, so it’s helpful to minimize your debts when possible.

To find out more about your credit score and what needs improvement, sign up for Credit.com free credit report card today.

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