Beware Venmo's New Hidden Fees
Whether you're paying the babysitter, engaging in some cash-only dealings, or trying to split the bill at a restaurant without annoying the waiter, Venmo has revolutionized how Americans pay each other.
It's easy to use, and it's made people more accountable than ever before. You ate half of last night's pizza when you initially claimed you weren't hungry? Expect a Venmo request.
After wild success, Venmo was bought by PayPal. PayPal has its own separate money-sending app. And Venmo has also spawned successful imitators, such as Square Cash and Cash App.
All these apps are available to download for free. But Venmo remains the most popular, most likely due to its intuitive, easy-to-use interface.
But there's some fine print lurking in these apps that you might not be aware of...
For both Square Cash and Cash App, there's a $250 weekly money-sending limit. If you go over that amount, you have to provide your name, date of birth, and the last four digits of your social security number. The limit then rises to $2,500 a week. But there's no limit to how much money you can receive through the app.
Venmo operates a bit differently from its competitors. The starting limit is a little higher at $299.99 per week. And it'll stay there unless you verify your account by logging in with Facebook or inputting a combination of your zip code, last four digits of your SSN, and birthday. After that, the new limit becomes $2,999 in sent cash per week. And again, there's no limit to the amount of money you can receive.
But Venmo has recently implemented some hidden fees. I've been burned, but I don't want you to be.
Venmo was initially set up so it was free to use if you linked a debit card, credit card, or a bank account.
But Venmo has recently, and quietly, added some hidden fees. If you're not careful, they'll take a taste every time you transfer those in-app funds to your bank account.
Early last year, Venmo started offering two transfer options: an instant bank transfer option with a fee ($0.25) and a several-day bank transfer, which remained free. But now, Venmo takes a 1% fee on its instant bank transfers, minimum $0.25 and max $10. You can only use its free standard transfer service if you link your bank account.
It might not seem like much, but if you're using Venmo several times a week, those hidden fees can add up fast.
You won't receive any notifications. And those percentages will be happily pocketed by the good people at PayPal.
What you need to do today, if you're a frequent or even an occasional Venmo user, is go into your account settings to link your bank account. This will require your routing and account number.
And if you have a mobile banking app, I'm pretty sure every major bank has one now, just log in to your mobile banking through the Venmo app, and you should be good to go.
You'll then have the option between that 1% instant transfer fee and a free standard bank transfer.
This entire adjustment shouldn't take you more than a few minutes. But it'll save you countless cash in the long run.
I wish you countless fee-less mobile cash exchanges!
That's all for now.
Until next time,
Pro Trader Today