I know it can be confusing trying to figure out whether PayPal or Venmo better fits your needs. You’re not sure if you want something more business and commerce focused or a friendly, social way to pay people back. Well have no fear, we’ll break this all down step-by-step so you have all the info to decide what works best!
First, let me give you some quick history on both brands…
Brief histories – PayPal founded way back in 1998!
PayPal as we know it today actually started in 1998 under the name Confinity before rebranding. A few key events:
- Founded by technology titans like Max Levchin, Peter Thiel, Elon Musk
- Initially focused on cryptography and digital security
- Pivoted to online payments and launched PayPal in 1999
- Acquired by eBay in 2002 for $1.5 billion!
Venmo meanwhile is still a new kid on the block:
- Founded originally as independent company in 2009
- Focus on peer-to-peer payments between friends
- Acquired by Braintree payments in 2012 ($26 million)
- Braintree then acquired by PayPal in 2013 ($800 million)
As you can see, PayPal has been helping people pay for things online for well OVER 20 years compared to Venmo‘s decade or so. But Venmo‘s been making waves with 40+ million users leveraging it connect their payments socially.
Now let‘s dig deeper…
Sending money and getting paid
Chances are you want to use one of these services to either pay someone back for something OR receive money yourself for selling goods/services.
PayPal’s been the go-to here for years both for peer-to-peer transfers as well as commerce payments.
Some key stats:
- Over $1.2 trillion in total payment volume annually!
- Supports payments to 100+ million merchants online
And get this – you don‘t even need an account to receive money – just an email address. PayPal will handle the rest getting you paid.
Venmo however keeps it simpler focusing ONLY on payments between users in its ecosystem. No paying random email addresses or businesses.
But for personal transfers it can‘t be beat in the US:
- Over $159 billion P2P volume annually
- Connected to major banks/debit cards like Chase, Citi, Wells Fargo
It also has that really fun social feed where you can see friend‘s transactions if you want to be nosey. Great way to split dinner or roomie expenses!
So if you’re selling goods/services online already – PayPal likely has the scale, name recognition and tools you need. But paying your roommate back for Uber rides? Venmo can’t be beat.
Locking down security
PayPal crushes it when it comes to protections against fraud or unwanted charges compared to Venmo:
- Provides purchase protection on eligible transactions
- Manages disputes and offers refunds in some cases
- Supports two-factor authentication for extra layer of security
Venmo unfortunately leaves you a bit more vulnerable:
- No purchase protection or guarantees at all
- Disputes can be messy and usually favor sender
So if you’re worried at all about someone accessing your account – PayPal has more safeguards in place to minimize your risk. But Venmo still uses bank-level encryption and security measures for transactions themselves if that brings you peace of mind.
Paying fees – who’s cheaper?
As with most financial services, fees are inevitable so understanding the pricing models of both platforms is key:
| Fee Type | PayPal Fee | Venmo Fee |
|---|---|---|
| Standard P2P Transfer | Free | Free |
| Debit Card P2P Transfer | 2.9% + $0.30 | $0.25 |
| Credit Card P2P Transfer | 2.9% + $0.30 | 3% |
Some key things to note:
- Venmo standard bank transfers are always 100% free
- But PayPal debit/credit fees slightly lower than Venmo‘s 3%
So if you primarily use bank transfers to avoid fees – Venmo is the move. But PayPal can make sense to cut some costs when having to rely on cards. Choose your fighter!
Using it globally
Given PayPal has been around so long, they’ve had time to push into TONS of countries and languages:
- Available in 200+ countries
- Supports 25 currencies globally
Meanwhile, Venmo is still US only:
- Connected bank account and debit/credit card required
- No international transfers or currencies
So if you need to pay or get paid by anyone outside the US – PayPal is likely your only option today. Venmo still needs to catchup before going global.
Hopefully breaking down those key elements gives you a better sense of the ideal user for each platform.
But to make it crystal clear, here are my recommendations on factors that should have you leaning PayPal or Venmo:
You may want to use PayPal if:
- Selling products/services online already
- Need purchase protection for peace of mind
- Managing payments across global client base
- Receiving payments from people without accounts
- Want flexibility to use credit cards freely
You may want to use Venmo if:
- Only care about personal transfers in the US
- Have limited payment/bank options
- Want simpler fees
- Love the social feed aspect with friends
- Need to split expenses/pay people back quickly
And don’t forget – PayPal owns Venmo! So you technically could leverage both in tandem if you’d like. But most people tend to lean one way or another based on those recommendations.
Phew, this was definitely an information packed breakdown huh? But I really wanted to provide you with clarity before having to make your own PayPal vs Venmo decision armed with knowledge.
My goal was to not only compare features, but also help you think through your specific payment needs at an individual level based on how each platform stacks up.
And I‘m always happy to help further – feel free to reach out with any other questions! Nothing makes me happier than seeing friends and readers get the most out of their financial tools.
