Choosing Venmo or Its Alternatives: An In-Depth Comparison of Money Transfer Apps
Peer-to-peer payment apps are becoming increasingly popular. PayPal, for instance, saw a 12% rise in transactions from 2022 to 2024, with 6.8 billion transactions in the last quarter of 2023 alone. Venmo, owned by PayPal, is also growing rapidly, with over 78 million users. It’s common to hear people say, “I’ll Venmo you,” whether they’re splitting a dinner bill, paying vendors at street fairs, or tenants paying rent.
Both PayPal and Venmo allow payments for goods and services with buyer protection. Other apps like CashApp and Zelle are mainly for personal transactions, though CashApp does offer a business account option.
Choosing the best money transfer app depends on your needs and who you’re paying.
**PayPal: The Original P2P Payment Platform**
PayPal started in 1998 as Confinity, making it easy to transfer money between friends and family or pay for goods and services online. Today, it stands out for its fee structure and additional features. Sending money to friends and family from your PayPal balance or linked bank account is free, but using a credit card incurs a fee of 30 cents plus 2.90% of the transaction. Business transactions have a 2.99% fee. Instant transfers to a bank account or debit card cost 1.75%, with a minimum fee of 25 cents and a maximum of $25. Standard transfers, taking one to three business days, are free.
PayPal offers various features, including:
– High-yield savings account
– Invoicing
– PayPal Checkout for e-commerce
– Cryptocurrency trading
– Debit and credit cards
– Pay in 4 “buy now, pay later” option
**Venmo: Fun and Easy for Splitting Bills and More**
Venmo, while similar to PayPal, has gained popularity for its social features. Transfers between friends and family are free unless using a credit card, which incurs a 3% fee. Venmo allows users to create groups to split costs for various expenses and share transaction details with friends using fun emojis. It also offers a debit card and cryptocurrency trading.
**Cash App**
Cash App functions like a bank account, offering a customizable debit card, the ability to send and receive money, stocks, or Bitcoin, and fee-free banking. It provides a savings account with up to 4.5% APY. Unlike PayPal and Venmo, Cash App has no fees for sending or receiving money or transferring funds to a bank account, with most transfers happening instantly. It’s also accessible to users as young as 13, making it a great tool for teaching teenagers about money management.