The world around us has changed as a result of the proliferation of the
Internet, and the realm of finance is no exception. The rise of mobile
devices and electronic payment systems forced a new paradigm shift
towards digital only payments as more and more transactions now take
place electronically without using cash. This digitization of payments
has been driven by consumers who wish to make purchases or transfer
funds using their mobile digital wallet. Digital wallets make shopping
more efficient, giving consumers the benefit of added convenience than
carrying a traditional wallet. PayPal is one of the widely used examples
of this type of cashless payment system.
PayPal is a global leader in the digital wallet ecosystem that enables
consumers around the world to pay, send money, and receive payments. The
great idea behind the digital wallet was to provide a host of
functionality of services to embrace digital identity through
authentication coupled with extra layers of security for secure
transactions. Venmo is yet another popular digital payment service by
PayPal Holdings Inc. and a popular peer-to-peer mobile payment
application. PayPal and Venmo are the two big names in the digital
wallet game that have a number of features in common. However, they do
have their fair share of differences.
What is PayPal?
PayPal is a digital money platform and a global leader in the digital
wallet ecosystem that enables consumers around the world to pay, send
money, and receive payments. It started as an online payment system
embedded into eBay, but later evolved into a robust payment system for
Internet and mobile transactions. PayPal was acquired by eBay in October
2002. This was after eBay’s attempt to launch its own payment service
called BillPoint, which was not well received by the eBay community and
finally fizzled out completely. PayPal is now a widely accepted form of
payment through smartphones or an Internet service, integrating its
service with local bank establishments, currencies, and standards from
countries around the world.
What is Venmo?
Venmo is a peer-to-peer digital payment service owned by PayPal and is
specially designed to facilitate transactions between smartphones. It
keeps a digital wallet you can use for other Venmo transactions, or you
can transfer funds to and from your bank accounts and debit cards.
Founded in 2009, Venmo operates in the United States and has
successfully transformed financial transactions into sharing
experiences. The selling point of Venmo is its social aspect. Users can
get access to a Facebook-like news feed, which is composed of public
transactions. It allows users to connect with their friends, send
payments, charge other users and choose to publicize their transactions
under various privacy settings.
Difference between Venmo and PayPal
Basics
Both PayPal and Venmo are the two big players in the digital wallet
game. PayPal is the most trusted, long-standing and widely used digital
payment service that has grown faster than almost any other business in
history and it continues to expand with a vision to become the global
leader in electronic payment systems. Venmo is a subsidiary of PayPal
and a peer-to-peer digital payment service specially designed to
facilitate transactions between smartphones. Venmo was acquired by
PayPal which is owned by eBay. What makes Venmo stand out is its social
nature.
Fee Structure
Both the digital payment services’ applications are free to download and
use. However, both PayPal and Venmo charge a 2.9% fee for a credit card
funded personal payment. PayPal, however, charge an additional 30 cents
for the credit payments, but the sender chooses who pays it. The best
thing about PayPal’s fee structure is that users can send and receive
personal payments without paying fees. The only time fees apply to
personal payments is when you use a credit card as payment method. In
addition, both offer free transfer of funds to and from bank accounts.
Users
PayPal offers three types of accounts to fulfill the needs of all kinds
of users: Personal, Premier and Business. Fees and features associated
with each account are different. Personal account is for individuals
looking to buy stuff or send and receive money between friends and
family. The Premier account is useful when you wish to sell things or
accept money, while the Business account, as the name suggests, is
strictly for serious business users. Venmo, on the other hand, is a
mobile payment service which is less business-oriented and is more
focused towards P2P transactions.
Ease of Use
PayPal does more than just process everyday payments. Although, millions
of buyers prefer the simplicity and security that PayPal offers, Venmo
is known for its ease of use. And the one thing that makes Venmo stand
out from other digital payment services is its social nature. Venmo is a
great tool among friends to pay each other electronically such as
sharing rent or splitting bills, and just anything else. Additionally,
it allows users to connect with friends, send and receive payments, and
publicize their transaction under various privacy settings.
Summary of Venmo and PayPal
It’s clear that millions of buyers prefer the simplicity and security
that PayPal offers. PayPal is a global leader in the digital wallet
ecosystem that enables consumers around the world to pay, send money,
and receive payments. PayPal has the potential to shake up the
commercial industry and enable new possibilities for global payments.
Venmo, on other hand, is known for its social aspect and ease of use,
and although, it’s not business-oriented, it is fast, casual, convenient
and trendy.