Posted at 12:38 PM ET on June 28, 2021 |
Experts say you should make your Venmo private.
You’ll soon pay more when using Venmo if you use the Instant Transfer feature.
Payment applications like Venmo make life more convenient. Instead of always having cash on hand to reimburse a friend or buy something from a small business, you can send money through Venmo quickly and easily. It has become a normal part of life to use these apps to pay others.
But if you use Venmo on a regular basis, you’ll want to be aware of some upcoming fee changes. Read on to find out more so you know what to expect.
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Venmo is about to get more expensive
Venmo is a peer-to-peer payment application. You can easily send money to other people using a mobile app on your phone. While there are some fees associated with these types of payment apps, some transactions are free.
Venmo recently announced an upcoming fee change; it will soon charge more for instant transfers. This feature allows users to transfer their money out of the app faster.
What to expect with the increase in instant transfer fees
The current fee for instant transfers is 1%, with a minimum charge of $ 0.25 and a maximum of $ 10. This will change on August 2, 2021, when the new rate goes into effect. The new instant transfer fee will be 1.5%, with a minimum charge of $ 0.25 and a maximum charge of $ 15.
The 1.5% fee is comparable to other payment apps like App Cash.
What is an instant transfer?
The Instant Transfer feature allows users to transfer money from their Venmo account to a linked bank account or qualifying debit card within 30 minutes. If you need quick access to funds, you will need to pay an instant transfer fee. Otherwise, you will wait longer for the money to arrive in your bank account or debit card. Typically, this process can take one to three business days for a transfer to complete.
What else is changing?
The increase in instant transfer fees isn’t the only change. Venmo also announced fees for using the app to receive money for goods and services. This type of transaction was previously free, unless a credit card was used. As of July 20, sellers who receive payment for goods and services will pay 1.9% of the payment plus $ 0.10.
If you are using Venmo for your small business or for a lateral restlessness, this is an important change to consider.
What these fee increases mean to you
If you regularly use Venmo’s instant transfer capabilities, you can expect to pay a bit more for this service. If you want to avoid paying extra fees, you might want to start adjusting your habits now in anticipation of the increased fees. Consider using the standard transfer method if you can wait for the money to arrive in your bank account.
Another option is to change the payment application. For example, Pay Pal currently charges an instant transfer fee of 1% when transferring money instantly to your bank account. Discover The Ascent’s best payment apps for more options.
If you’re using Venmo to collect payments for your small business or side business, the new product and service fees may mean that you will need to adjust your rates to reflect this increased fee.
Using mobile payment apps can make life more convenient, but it’s important to be aware of the fees associated with using these apps. This way, you can better budget your money and change your habits to avoid additional charges.
For more tips to improve your money matters, check out our personal finances Resources.
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