How Does Venmo Make Money? Here Are 8 Ways

Did you know Venmo comes from the Latin word vendere, which means “to sell” – or that it was once a music start-up where you could text bands to receive MP3s via email?

While Venmo may appear to be a free service, it can be pretty expensive if you don’t understand how it works as a business. So, how exactly does Venmo make money from its customers? Let’s find out.

What is Venmo?

Founded in 2009 by Andrew Kortina and Iqram Magdon-Ismail, Venmo is a leading U.S. mobile payment app. It lets people aged 18 and over send each other money for free.

You can transfer funds instantly to friends, family, or businesses at the touch of a button, with no transaction costs, right from your Android or Apple smartphone. 

Want to hold cash in your Venmo account like a wallet? You can do this too! But it isn’t essential—many exchange funds directly from their debit card, credit card, or bank account.

How Does Venmo Work?

How Does Venmo Make Money?

As we’ve seen, you can send money, receive money, and make standard payments using Venmo at no cost.

1. Credit Card Purchase

Venmo offers people a quick, easy way to pay for products and services. But did you know that the vendor (i.e., the business you’re buying from) has to pay a fee to process each purchase?

2. Pay-With-Venmo Transaction

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