Venmo to Raise Fees for Instant Transfers

by Natasha Gabrielle | Published on June 28, 2021

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You'll soon be paying more when using Venmo if you use the instant transfer feature.

Payments apps like Venmo make life more convenient. Instead of always having to have cash on hand to pay a friend back or purchase something at a small business, you can send money through Venmo quickly and easily. It has become a normal part of life to use these apps to pay others.

But if you use Venmo regularly, you'll want to be aware of some fee changes coming up. Keep reading to learn more so that you know what to expect.

Venmo is about to get more expensive

Venmo is a peer-to-peer payment app. You can easily send money to other people by using a mobile app on your phone. While there are some fees associated with these kinds of payments apps, some transactions are fee-free.

Venmo recently announced an upcoming fee change; it will soon charge more for instant transfers. This feature allows users to transfer their money out of the app more quickly.

What to expect with the instant transfer fee increase

The current fee for instant transfers is 1%, with a minimum fee of $0.25 and a maximum of $10. This will change on August 2, 2021, when the new rate goes into effect. The new instant transfer fee will be 1.5%, with a minimum fee of $0.25 and a maximum fee of $15.

The 1.5% fee is on par with other payments apps like Cash App.

What is an instant transfer?

The instant transfer feature allows users to transfer money from their Venmo account to a linked bank account or eligible debit card within 30 minutes. If you need quick access to the funds, you'll need to pay instant transfer fees. Otherwise, you'll be waiting longer for the money to hit your bank account or debit card. Typically, this process can take one to three business days for a transfer to complete.

What else is changing?

The instant transfer fee increase isn't the only change. Venmo also announced a fee for using the app to receive money for goods and services. This kind of transaction was previously free unless a credit card was used. Beginning July 20, sellers who receive payment for goods and services will pay 1.9% of the payment plus $0.10.

If you use Venmo for your small business purposes or for a side hustle, this is an important change to consider.

What these fee increases mean for you

If you're regularly using Venmo's instant transfer capabilities, you can expect to pay a little bit more for this service. If you want to avoid paying extra fees, you may want to begin adjusting your habits now in preparation for this fee increase. Consider using the standard transfer method if you can wait for the money to arrive in your bank account.

Another option is to switch payments apps. For example, Paypal currently charges an instant transfer fee of 1% when transferring money instantly to your bank account. Check out The Ascent's best payments apps for more options.

If you use Venmo to collect payments for your small business or side hustle, the new goods and services fee may mean you have to adjust your rates to accommodate for this increased charge.

Using mobile payments apps can make life more convenient, but it's important to be aware of the fees associated with using these apps. That way, you'll be able to budget your money better and change your habits to avoid added fees.

For more tips to improve your money matters, check out our personal finance resources.

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