Paypal & Venmo

[Whitman 694]

Though I'm an old, I pay most of my bills online but still write a few checks every month.  I carry some cash depending upon the situation, but most often when out  pay with a credit card and then just pay the bill at the end of the month.  I had heard of and was familiar with Paypal several years ago, but never had a reason to open an account.  Now I hear about , and a couple of my kids use, Venmo (which paypal now owns) to pay for some things.  Am I correct or close with the following:

-Paypal charges for all transactions except for paying moneys from your paypal account to someone else's paypal.  A credit or even a debit card is going to get a 3% or so charge.  You do have some protection with Paypal though for fraud.

-Venmo does not charge for a debit card transaction.  It does charge for a credit card one though.  Also, there is no protection for/from fraud.  Venmo should be used only if you know the person (friend/family/FWB/etc)?

Is this basically correct?  Do most people who use these things use one or the other, or have both depending upon the transaction and parties?

I'll hang up and listen.  Thanks.

[Zepol87 9185]

Use PayPal mostly but every now and then I use cash app. Not really a venmo user

 

[4th&Five 41525]

I use both plus Apple Pay and if they're linked to your bank account it doesn't charge you.

[El Diablo 4232]

5 minutes ago, 4th&Five said:

I use both plus Apple Pay and if they're linked to your bank account it doesn't charge you.

I've been using PayPal for years and iirc I had them charge me once but it was on a deal that went south. Ebay seller didn't have the merchandise in stock after I bought it and so I got a refund but rather than credit my bank they gave me a PayPal credit. I had to transfer THAT to my bank and I think there was a small charge for that. Hell, I didn't even know I had a PayPal ACCOUNT until then. Apparently people put money in there and then do transactions both ways out of the account.  No other issues though, ever.

[Dahobbs 17534]

2 hours ago, Whitman said:

Though I'm an old, I pay most of my bills online but still write a few checks every month.  I carry some cash depending upon the situation, but most often when out  pay with a credit card and then just pay the bill at the end of the month.  I had heard of and was familiar with Paypal several years ago, but never had a reason to open an account.  Now I hear about , and a couple of my kids use, Venmo (which paypal now owns) to pay for some things.  Am I correct or close with the following:

-Paypal charges for all transactions except for paying moneys from your paypal account to someone else's paypal.  A credit or even a debit card is going to get a 3% or so charge.  You do have some protection with Paypal though for fraud.

-Venmo does not charge for a debit card transaction.  It does charge for a credit card one though.  Also, there is no protection for/from fraud.  Venmo should be used only if you know the person (friend/family/FWB/etc)?

Is this basically correct?  Do most people who use these things use one or the other, or have both depending upon the transaction and parties?

I'll hang up and listen.  Thanks.

Roughly correct. I use Venmo to transfer money to friends/family for things like drinks, dinner, etc. Paypal would be what I'd use for an actual vendor (assuming I didn't just use my credit card). 

[Sbbruin 21844]

You can send a PayPal to "Friends and Family" at no charge.

[Whitman 694]

14 minutes ago, Dahobbs said:

Roughly correct. I use Venmo to transfer money to friends/family for things like drinks, dinner, etc. Paypal would be what I'd use for an actual vendor (assuming I didn't just use my credit card). 

That's kind of what I was thinking, with having Venmo and then also a credit or debit card, it sort of seems that Paypal will not have a purpose?  Maybe that is why Paypal bought Venmo?  Wonder if Paypal/Venmo will come out with a debit card to use for "non-friends" like actual vendors?

[HornOnTheBayou 8921]

Paypal does have a debit card that links to your account. It can also be used as an ATM card with no fees for withdrawal (except for the ATM teller fees).

Edited December 4, 2018 by HornOnTheBayou

[Dahobbs 17534]

12 minutes ago, Whitman said:

That's kind of what I was thinking, with having Venmo and then also a credit or debit card, it sort of seems that Paypal will not have a purpose?  Maybe that is why Paypal bought Venmo?  Wonder if Paypal/Venmo will come out with a debit card to use for "non-friends" like actual vendors?

Paypal has some limited purpose for those that hate credit cards. Gives them some of the protection of a credit card, but without the downside. From a technical perspective I believe it also more secure than credit card transactions, creating unique tokens for each transaction that are only viable for that transaction. Means even if the transaction is intercepted by someone, there is very limited damage they could do with the information. Google Pay and the others do something similar. 

[BottleRocket 644]

I have a Venmo account for the purpose of receiving rent payments from tenants that think writing checks has gone the way of the caveman (which it has). I then transfer those funds to our bank account. All done without fees. I’m not sure how Venmo makes money in this process.

[HornOnTheBayou 8921]

50 minutes ago, BottleRocket said:

I have a Venmo account for the purpose of receiving rent payments from tenants that think writing checks has gone the way of the caveman (which it has). I then transfer those funds to our bank account. All done without fees. I’m not sure how Venmo makes money in this process.

Volume

[Bat Guano 359]

On 12/4/2018 at 5:24 PM, BottleRocket said:

I have a Venmo account for the purpose of receiving rent payments from tenants that think writing checks has gone the way of the caveman (which it has). I then transfer those funds to our bank account. All done without fees. I’m not sure how Venmo makes money in this process.

[NeverMarryAStripper 21900]

On 12/4/2018 at 5:24 PM, BottleRocket said:

I have a Venmo account for the purpose of receiving rent payments from tenants that think writing checks has gone the way of the caveman (which it has). I then transfer those funds to our bank account. All done without fees. I’m not sure how Venmo makes money in this process.

The charge the sending party a fee on transactions using credit cards and some non major debit cards I believe.

[ztejas 43419]

On 12/4/2018 at 5:24 PM, BottleRocket said:

I have a Venmo account for the purpose of receiving rent payments from tenants that think writing checks has gone the way of the caveman (which it has). I then transfer those funds to our bank account. All done without fees. I’m not sure how Venmo makes money in this process.

Idk if Venmo makes money or not - they are owned by PayPal. On top of transaction costs (some transactions are free, some aren't) I imagine that they create a lot of equity through using their debt to consumers to invest and generate interest (basically escrow). 

I ran through their 2018 annual report and thought this was pretty interesting:

Quote

As of December 31, 2017, approximately $26.4 billion of unused credit was available to PayPal Credit account holders compared to $28.8 billion of unused credit as of December 31, 2016. While this amount represents the total unused credit available, we have not experienced, and do not anticipate, that all of our PayPal Credit account holders will access their entire available credit at any given point in time.

Their total assets ending in 2017 were $41B - meaning that that $26B-$29B is a HUGE amount of cash they can play around with. 

I suppose there are a number of ways they could carry this on their balance sheet. It's an aging A/P scenario that I would think is pretty unique for a number of reasons, where at some point they can probably claim a % of that outstanding credit as income. Basically, I would imagine they generate revenue in a very similar way that banks do - except the accounting is probably more complex and creative as they are a 3rd party.

I'm a little hungover and my accounting is rusty so if someone else wants to jump in feel free. 

[Bill Clay 48]

1 hour ago, ztejas said:

As of December 31, 2017, approximately $26.4 billion of unused credit was available to PayPal Credit account holders compared to $28.8 billion of unused credit as of December 31, 2016. While this amount represents the total unused credit available, we have not experienced, and do not anticipate, that all of our PayPal Credit account holders will access their entire available credit at any given point in time.

It think this is discussing unused credit lines they've extended to customers (like a credit card) and not cash reserves sitting in a PayPal account waiting for a user to transfer it to their bank. But otherwise your point is valid - there is plenty of "not yet transferred" cash on their books they could use to invest and generate interest just like a bank would do.

[ztejas 43419]

Just now, Bill Clay said:

It think this is discussing unused credit lines they've extended to customers (like a credit card) and not cash reserves sitting in a PayPal account waiting for a user to transfer it to their bank. But otherwise your point is valid - there is plenty of "not yet transferred" cash on their books they could use to invest and generate interest just like a bank would do.

You're totally right. I was skimming. Their annual report is a beast. 

Thanks for the correction. 

[MacLaren 62]

On 12/4/2018 at 1:16 PM, Whitman said:

Though I'm an old, I pay most of my bills online but still write a few checks every month.  I carry some cash depending upon the situation, but most often when out  pay with a credit card and then just pay the bill at the end of the month.  I had heard of and was familiar with Paypal several years ago, but never had a reason to open an account.  Now I hear about , and a couple of my kids use, Venmo (which paypal now owns) to pay for some things.  Am I correct or close with the following:

-Paypal charges for all transactions except for paying moneys from your paypal account to someone else's paypal.  A credit or even a debit card is going to get a 3% or so charge.  You do have some protection with Paypal though for fraud.

-Venmo does not charge for a debit card transaction.  It does charge for a credit card one though.  Also, there is no protection for/from fraud.  Venmo should be used only if you know the person (friend/family/FWB/etc)?

Is this basically correct?  Do most people who use these things use one or the other, or have both depending upon the transaction and parties?

I'll hang up and listen.  Thanks.

Venmo only charges a 1% fee if you select the immediate transfer option, otherwise its free if you choose the next day deposit option.   They shut down their website so no you pretty much just have to use the app.  I prefer it to Paypal as its alot easier and cheaper to use IMO.  

[zork 629]

Quickpay with Zelle is what my renters use, mostly.  If they use it I get the money very fast and so far so good.  I use it to move money to other accounts as well. 

Haven't tried Venmo.  Used paypal years and years ago but not recently.

[Mrs Whiggins 13050]

One of my children wants to set up a Venmo with his buddies and asked for advice but I have never needed this form of payment. After reading above, it seems Zelle is preferred and I know his bank uses that. If for whatever reason he can't use Zelle and needs Venmo, any advice on things to avoid or must dos? We were thinking that he might want to go the credit card route and eat the transaction fee because he isn't always great with details and it seems important with this app. If he uses Venmo for awhile he can always delete it later correct?

[tigol 2395]

One of my children wants to set up a Venmo with his buddies and asked for advice but I have never needed this form of payment. After reading above, it seems Zelle is preferred and I know his bank uses that. If for whatever reason he can't use Zelle and needs Venmo, any advice on things to avoid or must dos? We were thinking that he might want to go the credit card route and eat the transaction fee because he isn't always great with details and it seems important with this app. If he uses Venmo for awhile he can always delete it later correct?

Disable all linked social media accounts and phone contacts. If not, the folks he pays and described items will be visible to anyone else in his contacts with the app.

[elfenix 34232]

cash app doesn't have the ridiculous social feed. 

[TeeDubya 3362]

I use Apple Pay pretty heavily among friends and family.  Then Venmo.  Paypal for some purchases.

[gyroprotagonist 2592]

you can set Venmo txs to be private.  why people want show who they pay and how much i will never know.

[Nice Guy Eddie 13511]

 

we mainly use Venmo at work except one person uses Zelle exclusively. It’s a pain when she wants to pay the group. One other person uses zelle in addition to Venmo so that person has to transmit all money from and to that zelle only person.  Don’t let your son be the one person that uses different tech.

[Mrs Whiggins 13050]

Thank you for the info. Yes, I think he is going to ask his group and see if Venmo is all they're using. They have saved up and are going to do some traveling together and want to have things organized and responsibilities somewhat equitable. Seems no one uses cash in hand anymore.

[mycox 582]

Splitwise is perfect for group trips. Just settle up at the end of the trip. Pay how you wish.

Edited October 11, 2022 by mycox