A Deep Dive into How Venmo Makes Money

Venmo is an online payment platform that allows users to send and receive money from friends, family, or other contacts. It has gained immense popularity in recent years thanks to its ease of use and convenience. But how does Venmo make money? Journey with us as we explore how Venmo makes money from its user base.

What is Venmo?

Established in 2009, Venmo is an app for peer-to-peer money transfers and payments. The payment method is known for its timeline feed, where users and their connections in the mobile app can send payments to each other using emoji messages.

With Venmo, you can send and request funds from other Venmo account users. The mobile app takes care of the stress of reimbursing friends and family for dinner out or other shared expenses.

However, Venmo was not created for buying or selling goods among strangers. Rather, it can only be used for online transactions with certain merchants, including Amazon, or sites with a Venmo payment button similar to PayPal’s.

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How Many Users Does Venmo Have in the US?

According to a recent report, Venmo had 77.7 million active users in the United States in 2022. This represents a 10.8% yearly increase from the previous year. The report further shows that the payment method’s number of users has been increasing yearly. In 2019, Venmo had 41.5 million active users, which grew by 50.8% in 2020 to 62.6 million.

Analysts linked this significant growth to the CoronaVirus Pandemic, which made people stay home and carry out online transactions. In 2021, the number of Venmo customers in the United States also increased by 12% to 70.1 million.

How Does Venmo Make Money?

Below are the four ways that Venmo online payment method generates revenues:

  1. Fees Associated with Transactions

The most obvious way that Venmo makes money is through fees associated with transactions. When a user sends or receives cash via the app, Venmo charges a small fee. This fee varies depending on the type of transaction; for example, some types of transfers incur higher fees than others.

In addition, if users send funds to someone outside their contact list, they may also be charged a higher fee. However, these fees are relatively small compared to the traditional bank and wire transfer fees.

  1. Interest-earning Accounts

Venmo profit also comes from interest-earning accounts called “Venmo Plus.” These accounts are available to those Venmo has approved, offering features such as higher deposit limits and access to more investment options. For each account opened under this program, Venmo earns interest income from customers’ deposits.

  1. Merchant Partnerships

In addition to transaction fees and interest income from Plus accounts, Venmo also generates revenue from merchant partnerships. When customers use their Venmo account on a merchant website or for in-person transactions (such as at a restaurant), the merchant pays a processing fee for each purchase made using the app. This fee is typically split between Venmo and the merchant’s payment processor (e.g., Stripe or PayPal).

  1. Advertising Revenues

Finally, Venmo makes money through advertising revenues generated by their popular social media platform feature — known as “the feed” — which allows users to share various updates with their friends and followers while making payments within the app. Companies pay for sponsored posts and ads that appear in users’ feeds, which generates additional revenue for Venmo.

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Quarterly Total Payment Volume (TPV) of Venmo in 2017-2022

Venmo TPV, by quarter 2022. Image Source: Statista

In the first quarter of 2022, Venom’s TPV showed an annual growth of around six percent. The brand had over $63 billion worth of TPV at the end of the quarter, compared to $60 million in Q3 2021. Venom is a United States-based e-wallet owned by PayPal. According to online payment users in the US survey carried out in February 2022, 32% of the participants had used Venmo for transactions in the past year. 

How to set up a Venom account

Creating a Venom account is straightforward. It just requires you to follow a few simple steps. You should be able to create your Venom account in five minutes or less, depending on your internet speed. Below are the step-by-step instructions on how to join Venom. 

Download the app or visit the brand’s official website

The first step to creating a Venom account is to download the mobile app or visit the brand’s official website. You can easily download Venom’s app from Google Play or Apple Store. 

Sign-up for an account with your personal information

Once you are on the Venom website, the next thing is to register an account with your personal information. To do this, simply click the “Get Venom” button and choose the type of account (Personal or Business) you want to create. 

After picking the account type you want to create, you’ll be redirected to a page where you’ll need to fill in a few details, including phone number, email, full legal name, username, and password.

Verify your email and phone number 

When you sign-up with Venom, you’ll be given the option to create only a personal account or both business and personal profile. Irrespective of the type you pick, you’ll need to verify your email and phone number. 

Verifying your phone number and email is essential because any funds sent to an unverified phone number and email won’t get to your Venom account. 

Link and verify your bank accoun

To send funds directly from your bank to other Venom users, you need to link and verify your bank account. It’s essential you take the time to verify your banking account before transferring funds to your Venmo account to avoid issues. 

You can verify your Venom using two different methods — Instant verification or Microtransfers. Here is a guide on how to confirm your bank account on Venom.

Venmo Competitors

There is no doubt that Venmo has revolutionized the way people transfer money to friends and family since its release. However, several other competitors have stepped up their game, offering unique features and benefits that give Venmo a run for its money. 

Below are the four main e-wallets competing for market share with Venmo.


Zelle is a P2P payment platform that offers instant money transfers between bank accounts. Unlike Venmo, Zelle operates directly within banking apps, making it a convenient option for users already linked to their financial institutions. With its emphasis on security and speed, Zelle provides a robust alternative to Venmo.

Google Pay

launched September 19, 2011, Google Pay is a robust Venmo alternative that offers a user-friendly interface and seamless integration with other Google services. With support for bank account and debit card linkages, along with peer-to-peer payments through Google Assistant, it provides quick and convenient money transfers for Android and iOS users.

Apple Pay

This e-wallet has integrated its payment system into the iOS ecosystem, making it a natural contender in the P2P payment arena. Users can send and receive money through iMessage or Siri, and transactions are authenticated using Touch ID or Face ID for enhanced security. With its seamless integration with other Apple services, Apple Pay is a convenient choice for Apple device owners.

Cash App 

Developed by Square, Cash App has gained significant traction as a Venmo alternative. This platform allows users to send and receive money quickly while also providing features like a Cash Card for making purchases and even investing in cryptocurrency. Cash App’s versatility and accessibility have made it popular among younger users.

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Does Venmo have any shortcomings?

Despite being a powerful payment app, Venmo has some things that could be improved. Its major limitation is that it’s only available to US users. You can use Venmo to transact with someone outside the United States.

Another drawback is that Venmo is only available for personal use. Businesses can’t directly use it. The last shortcoming we encountered while using the Venmo payment method was the $3,000 weekly transaction cap.

Venmo’s four-pronged approach helps them to generate revenue and maintain competitiveness in a dynamic market. Through their merchant services and payment processing fees, they drive revenue growth, while targeted advertising opportunities create additional income streams. With these advantages, Venmo is strongly positioned to sustain profitability in the future.

Frequently Asked Questions

Here are answers to the most commonly asked questions about how Venmo makes money.


Creating a Venmo account is free and doesn’t have any monthly fees. A simple transaction from a Venmo debit card, Venmo cash balance is also free. However, Venmo charges the sender a 3% fee if a credit card is used to pay.


The company makes money from transaction fees, advertising revenue, merchant partners, and interest account earnings.


  • Uchenna Agwu

    Uchenna Agwu is a seasoned professional with six years of industry experience creating finance content. He's a skilled SEO copywriter and content manager who tailors his content to meet the needs of his target audience. Uchenna Agwu simplifies complex financial concepts to help readers make informed decisions about making money, budgeting, saving, and investing. His content combines expertise with a knack for SEO and analytics to deliver measurable results.

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