The payment app is also increasing fees on instant transfers.
Electronic payments app Venmo has announced it will be adding fees to certain business and personal transactions beginning in July. In an email to customers in June, Venmo said it will be charging a fee for transactions identified as “goods or services” and increasing the fee for instant transfers.
Many small businesses and independent contractors use Venmo as a quick and easy way to trade money for services. Until now, Venmo only charged a transaction fee for accounts classified as businesses. But beginning on July 20, 2021, Venmo will allow buyers to classify their transaction as a good or service and get purchase protection coverage for the transaction.
The new fees will cost sellers 1.9% of the sales price, plus 10 cents. For instance, if you sold a sofa to someone for $300, Venmo would charge $5.70 plus $0.10 for a total of $5.80. Individuals will be motivated to label the transaction as a business transaction to get coverage under Venmo’s purchase protection program.
Venmo is owned by PayPal and says the changes are being made to help protect consumers who purchase products using the platform. The announcement comes less than two weeks after PayPal said it would also raise fees on transactions.
Venmo is also upping the charge on instant transfers from 1% with a cap of $10 to 1.5% with a minimum charge of $0.25 and a maximum of $15. You will still be able to transfer money for free in one to three business days. The changes are probably going to impact people the most who use Venmo for one-off transactions or side businesses.
In addition to new fees, Venmo is changing privacy settings so you can choose who sees your Friends list and keep your profile from being seen in others' Friends lists.
How often do you use Venmo? Share your thoughts in the comments on the new fee.