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Venmo


Randall
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I offer the Venmo and PayPal option to my clients.  I would say around 35% are using it.  I provide my email address as their link to pay me.  I also believe you can send an OR Code or "Request Payment".  I used the OR Code option once.  Overall, it's worked well for me and is very efficient and easy to use.  One caveat to keep in mind, if the client pays via a credit card Venmo and PayPal do take a fee, around 3%, to process the payment...at least they have for me.  Anytime a client has paid via a direct debit option from their bank account, I have received the entire amount I invoiced. 

Both Venmo and PayPal have business account options that offer services beyond opening a personal account.  I think the business accounts charge a fee regardless as to how the client pays.   

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33 minutes ago, Eric said:

Venmo is owned by PayPal.  It's safe.  

I'm not sure why it needs the weird social aspect, but that's a different subject.

Great point about Venmo's weird social aspect, Eric.  I use Venmo to send money to my grandsons (age 20 & 21) occasionally for gas, food, etc while in college.  Amazing what I see in some of those comments between them and their friends, and sometimes more amazing they aren't aware that Pawpaw is seeing some of that stuff.  Or maybe they know I've already seen & heard it all and it won't make any difference in what I'm sending them. 🤑

Back to the main point, I've had clients use PayPal to pay me a few times, and it is super easy.  I guess Venmo would be just as easy & safe for business.  There's also Zelle to consider for business payments, although it's a little more complicated.

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I accept checks, cash, and all major charge cards. I accept PayPal. (I also have education and a few other biz expenses that accept PayPal, so I leave a fair amount in my PayPal account.) I have one client who wanted to pay via Venmo, so I signed up for it. She's paid me via Venmo for about three years now. I do tell people I have it, but only the one taker so far. (I move Venmo to my checking account immediately.) The PayNow button on my website is processed by PayPal, and more and more clients use it. Otherwise, I process credit cards AND take e-checks via Intuit. Actual checks I deposit via my bank's iPhone app. I want to make it as easy as possible for people to pay me. And, easy for me to get the money in my account quickly. It's more than a 20-minute drive one-way to any bank from my home office, so I gladly pay any fees to do everything electronically.

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I'm on the verge of signing up with Venmo, too -- gotta have a digital payment scheme of one sort or another now.  I really luvved Google Wallet/Pay but last month it transmogrified into the worst method of all -- see the raft of aggrieved reviews in Google Play Store for how mistreated its previous users feel.

I would have gone with Zelle as that's being promoted by my credit union, but its EULA requires users to consent to robocalls.  What the h*** is wrong with fintech, that commodifying our behavior isn't lucrative enough but it's got to spam us too -- and in the most obnoxious way possible?!

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Since fintech is all about gathering as much information about you and your clients as possible and using that information to make more money,

I will continue to limit my use and involvement to the extent possible!  Equifax anyone?

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I have not gotten into accepting credit cards, and it has turned off a few people who want to pay everything by using their phone.  I've got to wonder how they were even alive before smart phones were invented.  They don't see the effect on recipients.  If presented with a bill for $100, they think all they have to do is pay $100 and everyone is deliriously happy.

I accept checks (and of course cash).  I prefer checks because it has the routing # and account # I can use to direct their refund deposit.  If they try to read off these numbers to me, they can leave out significant digits, and if I can actually LOOK at them, I have a safer feeling that it will be correct.

It's not just 4% or thereabouts you must add to the bill to cover the cost of a credit card network.  A credit card processor usually costs $75 per month in addition to the 3-5%.  And the $75/month is for 12 months of the year, not just end of January thru April.

For my 200 customers or so, it's just not worth the extra amount I would have to charge my clientele to cover this.  I'm with CBS on this - cash and checks.

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Corduroy Frog, online credit card vendors such as Square have no monthly processor fee though there may be an upfront charge for the swipe device.  I no longer use the swipe device. In my practice if a client wishes to pay by credit or debit card I go into my online square account, issue them an invoice which is emailed to them. The client may remit payment by clicking on a link to enter their credit or debit card details or ACH details for direct debit from their checking account.  In doing so the fees are 2.96% for credit/debit or 1% for ACH.  Yes, it is an extra step for me, but facilitates payment. I see vendors these days adding a credit card fee; I do not , or it is not separately stated since my fees for tax returns generally increase a bit every year. Oh, for direct deposit of refunds I require a voided check. 
 

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11 hours ago, cbslee said:

So your balance in a Venmo account is just an electronic number. It's not a bank account, it's not FDIC Insured,it's not real money.

Any time I've transferred my Venmo balance into my bank account, it's been successful everytime.  Never an issue with Venmo or PayPal.  My younger clients want that type of payment option...I'm happy to offer it.

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Started using Venmo this year. The response has been good especially among the younger generation. Right now I accept cash, check, Venmo and PayPal. Only had 1 client use PayPal last year. I do not accept cards and most of the younger folks do not even know how to write a check, all they know how to do is swipe. Venmo makes it easier for them to pay me so I am all for it.

 

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The Wall Street Journal:

"The Consumer Financial Protection Bureau is probing the way that Venmo, the digital money-transfer service operated by PayPal Holdings Inc., treats customers who the company says owe it money for transactions that went awry.

In a regulatory filing Friday, PayPal said it had received a “Civil Investigative Demand” from the CFPB “related to Venmo’s unauthorized funds transfers and collections processes, and related matters.” The company said the CFPB had requested documents and answers to written questions, and that it was cooperating with the regulators.

Venmo’s debt-collection tactics were the subject of articles in The Wall Street Journal in 2019 and 2020. The company has threatened to dispatch debt collectors on users who overdraw their accounts, even when those users are victims of scams, The Journal previously reported. Venmo continued its aggressive collection efforts during the coronavirus pandemic."

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I don't use a physical "swiper." I also don't pay a monthly fee as I process via Intuit and pay for QB each year. So, just the small % fee per transaction. If you take the time to email your client a QB invoice, your clients can pay by clicking a link on that invoice, and I think your fees are even lower if you use that method. Maybe a flat 50 cents for processing a "check." For your volume, there are probably some good discounts for you out there. Poke around on websites for Intuit, Square, Stripe, etc. Also, check with your friendly, local bank that has your biz checking account; they might process CCs and eChecks for you at a reasonable fee.

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"BuzzFeed News found President Joe Biden’s Venmo account after less than 10 minutes of looking for it, revealing a network of his private social connections, a national security issue for the United States, and a major privacy concern for everyone who uses the popular peer-to-peer payments app.

On Friday, following a passing mention in the New York Times that the president had sent his grandchildren money on Venmo, BuzzFeed News searched for the president’s account using only a combination of the app’s built-in search tool and public friends feature. In the process, BuzzFeed News found nearly a dozen Biden family members and mapped out a social web that encompasses not only the first family, but a wide network of people around them, including the president's children, grandchildren, senior White House officials, and all of their contacts on Venmo."

. . . . . . . . .

"Privacy Advocates and journalists have warned about Venmo’s privacy problems for years, yet the PayPal-owned app has persisted with features that can place people — including the president of the United States — at risk.

While many critics have focused on how the app makes all transactions public by default, Venmo’s friend lists are arguably a larger privacy issue. Even if a Venmo account is set to make payments private, its friend list remains exposed. There is no setting to make this information private, which means it can provide a window into someone’s personal life that could be exploited by anyone — including trolls, stalkers, police, and spies.

No other major social network or service has contact-based friend lists that are publicly accessible by default to anyone — and that cannot be made private. People use Venmo to get paid, often using their real names. They often also import their phone contact lists or Facebook friend lists — which the app highly encourages when you sign up — creating networks where people automatically “friend” dozens if not hundreds of other Venmo users to allow them to find people they want to pay more easily.

Venmo makes it impossible for users to hide their list of friends. To remove someone as a friend, a user has to unfriend the person manually."

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I revisit our payment receiving options at least annually.  Via a costco membership, I get a no monthly fee account (Visa, MC, Disc).  All sales are online, which are the highest rates, so YMMV.  Looking at the total fees vs the total collected for Dec, our overall rate (all fees included, such as auth entries) was 2.6%.  This is actually excellent, beating paypal by a significant amount (paypal would have worked out to about 3.25%).  The rub for us is what they call "non qualified" transactions, and ironically, "commercial" cards.  Other than those two types, the bulk are at 1.99% plus ~.29 cents.  (There are publicly available "tips" to ensure as many transactions as possible are "qualifying".)

Amex is an entirely different and more expensive "animal" (at or near 2x compared to V/M/D transactions).  Paypal, or other method where you are not acting as a direct merchant, would be more appealing to me if we had higher numbers of Amex transactions.

Depending on volume, you could also run into dollar limits per the processor's time frame.  The third party processors are pretty clear what their limits are.  If you elect to be a merchant, make certain you check with your processing partner to monitor your limits.  While it can be "fun" to reach your limit, it does cause frustration as you ask for (and hopefully receive) an increase.

Venmo's social aspect was a turn off for me, so I did not consider learning more.

 

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On 6/4/2021 at 2:52 AM, Lynn EA USTCP in Louisiana said:

Corduroy Frog, online credit card vendors such as Square have no monthly processor fee though there may be an upfront charge for the swipe device.
 

Lynn, thank you.  I'll look into Square and other alternatives.

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4 hours ago, Corduroy Frog said:

Lynn, thank you.  I'll look into Square and other alternatives.

My barber uses Square. I can’t think of a better recommendation for its services.  But he doesn’t dispense tax advice, which is a bit puzzling. 

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On 6/3/2021 at 6:22 PM, cbslee said:

It's not a bank account, it's not FDIC Insured,it's not real money.

Neither is PayPal.  I rarely leave more than a few dollars in my PayPal for that reason.  It's not real until it's in my bank.  

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Right! After reading this thread, Venmo is a hard "no" for me.  I take cash, checks, and already have Square and Paypal. That is enough for my clients, especially now that Square is also offering ACH debit directly from a bank account, and clients always have the ability to pay me via online banking too, or they can go to a MAC machine. 

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Thanks for all the comments.  I'm not sure now either.  Do you have to have 'Friends'?  I have the Square card but never used it except at first as a test, sending money to myself.  I have so few who ask about credit cards, it would take me a half hour to figure out how to do it.  I'll look into the going into my account and emailing an invoice.  That sounds much easier.  My practice is fairly small and for now, I just take checks and cash.  But I did have a couple of clients this year ask about Venmo.

 

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25 minutes ago, Randall said:

Thanks for all the comments.  I'm not sure now either.  Do you have to have 'Friends'?  I have the Square card but never used it except at first as a test, sending money to myself.  I have so few who ask about credit cards, it would take me a half hour to figure out how to do it.  I'll look into the going into my account and emailing an invoice.  That sounds much easier.  My practice is fairly small and for now, I just take checks and cash.  But I did have a couple of clients this year ask about Venmo.

 

The responses for this post seems to have individuals on one side of the topic or the other...either for or against.  There aren't too many in-between.  I've never had an issue with Venmo.  I choose to be private on the platform.  No one can see who I pay or who pays me except for the person who I pay or the person who pays me.  Obviously, Venmo sees the transaction and can use it for their internal needs, marketing etc.  Once I receive payment on PayPal or Venmo, I transfer the balance to my bank account.  Never, ever an issue.  

Today's younger clients want to pay via this platform or some other online platform.  I'm happy to offer it.  

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