In this day and age, everything is online, even our finances. You can transfer money with a few clicks on your phone. PayPal was introduced as one of the first non-bank banking service companies, and then along came Venmo, and people quickly started to wonderis Venmo owned by PayPal. And if so, what are the differences between them, and which one is better?
Ever since it came out in 1998, PayPal has quickly taken over the online payment service space, allowing people to quickly and easily transfer money online. Eleven years later, in 2009, Venmo was founded and quickly gained popularity because of its new take on peer-to-peer transactions, which now had a social feature. PayPal noticed the potential and bought Venmo for $800 million dollars back in 2013.
What Is PayPal?
PayPal was established in 1998. and went public in 2002 through an IPO. It was bought by eBay later that year, and then it became independent again in 2015. Now, PayPal Holdings, Inc. is a financial technology company used all around the world for fast online money transfers. You can find and download the PayPal app on GooglePlay or iTunes App Store, and you don’t even need an account to use their services. However, if you want to open an account, it won’t cost you anything, all you will need is your bank account information.
PayPal became so popular at the time because it had encryption that helped protect its users from fraudulent transactions. Today, PayPal is widely accepted, and it’s a multinational payment processing platform mostly used by businesses but individuals as well.
What Is Venmo and How Does It Work?
Venmo is a mobile payment service that became very popular because of its new solution for peer-to-peer transactions. Just imagine how annoying and difficult it was when you couldn’t simply transfer your buddy $3.50 for coffee with a few clicks on your phone, but you had to give him paper money and cents, and all you had was a twenty. That would lead to someone always owing money to their friends because they never had the exact amount, and so on.
Venmo noticed the problem and took the opportunity to create the biggest and most popular payment platform for smaller peer-to-peer payments. By using Venmo, splitting smaller bills with friends and family won’t be an issue anymore. There will be no more annoying situations in restaurants or movie theaters where everyone has larger bills and you can’t seem to get the exact change. Now you can simply write the exact amount and Venmo it to your friend. All that matters is that you both live in the US.
How Does Venmo Work?
Venmo is pretty simple to use and there are very few requirements. The first requirement is that you live in the US and you have an American mobile phone number you will be using within the app. You will also need a valid email address to create an account. On that note, you can create an account either via a mobile app or on their website. Besides basic information required for almost any other app, you will need to provide your bank account information. You can link your credit or debit card to your account. If you choose to link your credit card, you will have a 3% fee for each transaction, but if you link your debit card or bank account, it won’t cost you anything.
Is Venmo Owned By PayPal?
Ever since coming out in 2009, Venmo has made a big splash in the market of online payment platforms. During the following year, they earned over 1.2 million dollars. That’s why the company Braintree decided to buy Venmo for $26.2 million in 2012. However, only a year later, PayPal bought Venmo for $800 million dollars in December 2013. So, yes, by purchasing Braintree, Venmo has been owned by PayPal since the end of 2013. PayPal and Venmo are the two biggest and most widely used payment services. Now that PayPal is Venmo’s parent company, most people speculated that PayPal would try to integrate and transform Venmo. However, even though both apps have progressed over the years, they still remain different and separate.
What Are the Differences Between PayPal and Venmo?
Even though they are both owned by PayPal Holdings, Inc., both services have their pros and cons, they have many differences, and they are both better suited for different situations and transactions. While at first glance you might think that both payment services are the same – both of them will allow you to transfer money, receive payments, and shop online, these two platforms are different in many ways.
PayPal is meant for more formal, serious purchases and transactions. Most businesses and entrepreneurs use it as a form of payment since it also supports cryptocurrencies. With PayPal, you can transfer larger amounts of money – the limit is $60,000, and the maximum amount of a single transaction is $10,000. PayPal even offers you various financial services, such as loans. Venmo, on the other hand, is more catered towards younger people and smaller day-to-day transactions. Venmo even has a limit of $6,999.99 for transactions made in the previous seven days.
|Target Audience||Younger people||Businesses and individuals|
|Transaction Limit||$6,999.99 over 7 days||$10,000 per transaction or $60,000 a month|
|Offers various financial services (loans)||No||Yes|
Which One Is Better Overall – PayPal or Venmo?
Even though similarities between PayPal and Venmo are undeniable, slight differences between the two make a big impact on their target audiences. Both platforms are great for online money transfers, and they are the two most popular platforms for a reason. However, they were initially designed and created for different purposes, and that has stuck even to this day. PayPal was intended for businesses and more serious purchases and transactions, and Venmo was created with the sole purpose of making smaller payments easier and more accessible to younger people. So, both platforms are reliable, and you won’t make a mistake choosing either one of them – just think about what you will be using them for.