If you've ever had to transfer money through the internet, you've likely used Venmo for this task, considering the low—or no-cost transfers it offers.
Talking of costs, Venmo transfers are usually free of cost, which includes sending and receiving money—and if you've been charged for receiving money through Venmo, there's a solid reason for that.
In this guide, I'll explain why Venmo charges you a fee to receive money.
Does Venmo Charge a Fee for Receiving Money?
Yes, Venmo charges a fee to receive money but that will only depend on the origin of the funds. Let's see why you are getting charged on Venmo.
Why is Venmo Charging Me a Fee to Receive Money?
If you were charged on Venmo for receiving money, it is probably because the sender identified the funds as a payment for goods and services. Of course, this is when you do business through Venmo and this is regardless of whether you're receiving the funds with your personal or business profile.
That said, Venmo charges a seller transaction fee of 2.99% of the total amount each time you receive payments for goods and services on your personal profile. This fee is usually referred to as a Venmo fee for goods and services.
But these fees aren't the same as a business profile because that kind of profile is purposely for business.
Does Venmo Charge a Fee for Businesses?
Yes, Venmo charges a fee for businesses on the platform.
If you own a business profile, there's a great chance you know how the fee structure works. However, if you don't, know that payments sent to your business profiles will incur a fee of 1.9% + $0.10 and a fee of 2.29% + $0.09 for all Tap to Pay payments.
So don't open a business profile because you see the perks it offers—look at the bigger picture because you won't want to incur this kind of fees on Venmo if you aren't really a business.
Does Venmo Charge a Fee to Send Money?
No, Venmo does not charge a fee when you use your balance, linked debit card, or bank account to send money to other Venmo users. However, Venmo will charge you a 3% fee when you send money with your linked credit card.
How Much Does Venmo Charge for Instant Transfer of $500?
Venmo charges a 1.75% fee for instant transfers from your account. So when you calculate the fees for sending $500 from your Venmo account, you should have something like $8.75 that will be charged for this instant transfer.
Venmo Fees to Cash Out
Venmo does not charge fees for anyone cashing out through the standard transfer option which takes 1-3 business days to reach your bank account and 48 hours to reach your debit card.
However, you'll be charged a 1.75% fee for cashing out through the instant transfer option that arrives in minutes in your linked bank account or eligible debit card.
How to Avoid Venmo Fees for Receiving Money
The best way to avoid Venmo fees when receiving a payment for a purchase on Venmo is by asking the sender not to mark the payment as for goods and services. This way you'll be receiving the payment as any personal payment on the platform.
However, only a few senders will agree to do this because when they mark a payment as for goods and services, they get covered by Venmo's purchase protection in case the seller doesn't provide them with what they paid for.
Know that there's no way to avoid Venmo fees if you're using a business profile on the platform.
Final Thoughts
Venmo is a popular payment service that allows users to send and receive money safely and conveniently. Money transfers from one Venmo account to the next are usually free and if you are charged for receiving money on Venmo, it is probably because the sender marked that payment as one for goods and services.
This guide explains more about Venmo's fee structure so you'll be well-informed the next time you want to receive payments through the app.