Does Venmo Charge a Fee for Businesses?

Venmo has become a widely recognized platform for sending and receiving money between individuals. Its convenience and social features have also led to its increasing adoption by businesses seeking to streamline payment acceptance. Understanding the associated costs is important for any business considering or currently using the platform. This article will provide a clear overview of the fees Venmo charges for business-related transactions.

Overview of Venmo Business Account Fees

Businesses using Venmo operate under a different fee structure compared to personal users. While sending money to friends and family through Venmo is generally free when funded by a linked bank account or Venmo balance, business transactions incur specific charges. These fees enable Venmo to cover the operational costs associated with processing commercial payments and providing tools tailored for businesses. Unlike personal accounts, which are primarily designed for casual money transfers, business profiles are equipped to handle sales and service transactions. There are no setup fees or monthly charges for a Venmo business account.

Key Transaction Charges

The primary fee businesses encounter on Venmo is for receiving payments for goods and services. Venmo charges a standard seller transaction fee of 1.9% plus $0.10 for each payment received into a business profile. This fee applies when customers pay directly from their Venmo account or via QR codes displayed for business profiles. For instance, if a customer pays $100 to a business, Venmo deducts $1.90 (1.9%) plus $0.10, resulting in the business receiving $98.00.

This deduction occurs automatically from the payment amount before it is credited to the business’s Venmo balance. The fee applies to payments of $1.00 or more. This transaction fee is non-refundable, even if the business later issues a refund to the customer. Certain payment methods, such as contactless payments, may incur a slightly different fee.

Other Business-Related Costs

Beyond the primary transaction fees, businesses may incur other costs depending on how they manage their funds. One common additional fee is for instant transfers of money from a Venmo balance to a linked bank account or eligible debit card. This service allows funds to be moved typically within 30 minutes, but it comes with a fee of 1.75% of the transfer amount. There is a minimum fee of $0.25 and a maximum cap of $25 per instant transfer.

Businesses can avoid this fee by opting for a standard bank transfer, which typically takes one to three business days to process and is free of charge. Venmo also has fees for certain actions such as sending money using a credit card, which incurs a 3% fee.

How Venmo Applies and Reports Fees

When a customer makes a payment to a Venmo business profile, the applicable transaction fee is automatically deducted at the time of the transaction. The net amount, after the fee deduction, is what appears in the business’s Venmo balance. This automatic process means businesses do not need to manually calculate or remit fees separately. Businesses can review their transaction history within the Venmo app or online dashboard to see detailed records of payments received and the fees applied to each.

For tax reporting purposes, Venmo is required to provide a Form 1099-K, Payment Card and Third Party Network Transactions, to businesses that meet certain thresholds. For the 2024 tax year, the Internal Revenue Service (IRS) requires reporting if a business receives more than $5,000 in gross payments for goods and services through Venmo, regardless of the number of transactions. This threshold is scheduled to change to $2,500 for the 2025 tax year. Some states have different, often lower, reporting thresholds, which may also trigger a 1099-K form. Maintaining accurate records of all Venmo transactions and understanding these reporting requirements is important for tax compliance.