In our Contactless Payment 101 series, we’re breaking down the basics of processing transactions device-free. Today, we’re talking Venmo payments.

Let’s be real: accepting payments as a small business owner can feel a little murky. 

There are various fees for different types of credit card processing — Square here, Stripe there —and that client who still writes you a check after every hair appointment. 

And then, there’s Venmo

You likely use the Venmo app for peer to peer payments, i.e. sending friends and family money.

Some small businesses and sole proprietors also use their personal Venmo accounts to accept payments from customers.

And now, Venmo announced it’s going to offer contactless payment processing for small businesses with Venmo for Business.

Is Venmo the right answer for you?

Using Venmo for your business transactions might seem like a great idea, but there are several reasons why we don’t recommend it. We’re covering them below, plus what you should do instead if you’re curious about trying a mobile payment app for your business.

Why You Shouldn’t Use Personal Venmo for Business Payments

Venmo Prohibits It

Let’s just get this out of the way before digging in: Venmo explicitly states on its site that you should not use it for business payments.

In response to the question, “Can I use Venmo to buy or sell merchandise, goods, or services?”, the team states: 

Venmo may NOT otherwise be used to receive business, commercial or merchant transactions, meaning you CANNOT use Venmo to accept payment from (or send payment to) another user for a good or service, unless explicitly authorized by Venmo.  

Unlike other payment processors, Venmo doesn’t charge a processing fee (because it’s meant to send and receive money between peers). This can make it — ahem — very tempting to use for small business transactions, but it’s not OK with the company. 

Venmo Will Crack Down on Businesses Accepting Personal Payments

Shortly after its launch of Venmo for Business, the company sent out a series of notifications to Venmo users about new policies and fees for business transactions. Venmo started enforcing these rules on July 21, 2021.

Peer-to-Peer Venmo Doesn’t Have the Features You Need

Let’s just say we set aside the explicit rules against using your personal Venmo for business payments and that you’re thinking, “But…is it really that bad to use it for business, you know, under the table?”

(Of course, you would never think this! We would never assume you would! We just love hypotheticals.)

Short answer: It’s still not great.

The Venmo app was built for peer-to-peer payments, i.e. for sending and receiving money between friends and family. Its personal accounts are not designed as an online payment solution for small businesses.

That means no records for filing taxes and unofficial documentation in your bank account.

Monthly reports don’t exist.

A client can’t hit an “add 20% tip” option.

It all adds up to a lot more manual work — and more of a risk of you making mistakes.

There Are Privacy Concerns

Ever figured out two people you know are dating based on Venmo transactions? (This really can’t just be me.)

If a customer or client pays you through the Venmo app and doesn’t mark it as private, their entire network sees the transaction.

That’s fine, for the most part, but what if they don’t want people to know they’re sneaking off for a massage or haircut on a Tuesday afternoon? 

It’s like a social network for payment processing.

Lack of Customer Protection

Venmo bills itself as “peer-to-peer payments” for good reason: it’s designed for two peers — two friends who trust each other — to easily pay one another.

Once someone sends you money via Venmo, that’s it.


We know you’re honest and would refund a client if they accidentally overpaid you, but do you really want to ask someone to send you money with no guarantees?

It’s not ideal customer service by any means.

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But What About Venmo for Business?

All that said, Venmo has recently expanded into the world of payment processing for businesses. There are a lot of great perks, including:

  • Contactless payment through QR code
  • A relatively low rate for card-not-present transactions (1.9% + $0.10 per transaction)
  • A “business profile” that functions sort of like Venmo’s personal transaction feed (The company argues that this is free organic marketing, but they’ve had to answer a lot of questions, including those about the elusive Venmo Debit Card.)
  • Easy linking between your business account and personal accounts to keep sales separate but easily hop between each

Cons of Venmo for Business

[NEW] Auto-Reports to the IRS

The IRS is cracking down on payments made through apps, from Venmo to Cash App and Zelle, “to ensure those using third-party payment networks are paying their fair share of taxes,” as of January 2022.

The policy change affects payments of $600 or more for goods and services. Third-party payment networks are also required to send authorized merchants and everyday Venmo users a 1099-K form for transactions made. Venmo explains everything.

While the policy change is unlikely to be heavy-handed its first year, focusing only on business transactions, small business owners and sole proprietors will take the biggest hit.

Venmo Charges a Fee

Yes, with the introduction of Venmo for Business, processing payment will come with a fee attached, and it is nonrefundable.

Venmo’s current rate is 1.9% + $0.10 per transaction.

To put that in perspective: for a $100 bill, you’ll pay $2 in fees to Venmo.

Again, that fee is nonrefundable – even if you send money back to a client for overpayment.

Not Integrated

The biggest objection we have to Venmo for Business is that it’s not integrated with the other tools most small businesses need to run their days.

While it’s great to have your personal transactions and business transactions linked, the idea of toggling between a scheduling app, marketing tools, and payment app at checkout is annoying, to say the least.

It’s also harder to spot patterns in your daily work.

Not Designed for Tips / Accepting Gratuity

If you rely on tips for a part, or most, of your business revenue, Venmo’s interface may not be for you. There are no built-in gratuity suggestions — which means customers have to crunch their own numbers.

The Payment Processors You Should Use Instead of Venmo

If you’re considering accepting payments through the Venmo app because you’re looking for an affordable way to process credit cards — or to go fully contactless with your payments — there are other options that are made specifically for small businesses and their bank accounts.

Schedulicity’s Payment Processing (Now with Norm)

Yeah, OK, we’re biased.

But we created our built-in payment processing specifically for small business owners and service providers.

That means industry-low fees and a simple format, plus auto-suggested tips built right into the checkout.

Our built-in payment processor comes with:

  • One flat rate of 2.5% + $0.15 per transaction* for every type of payment, including card-present and card-not-present transactions
  • Available next-day funding
  • Flexible payment methods including prepayments, auto-billing, pay by QR code, pay by text, and more
  • Contactless and device-free payment options, including Norm

If you’re looking for a small business credit card processor, Schedulicity’s rates are excellent. Thank you, Schedulicity, for being an example of ethical business practice and service.” —Vanessa, Massage Therapy


Send the bill straight to your client’s phone with Norm by Schedulicity. Ditch the card reader, speed through payment, and bump up tips. Available now on Schedulicity.

Learn more about Norm

So, What’s Norm?

Norm is a contactless payment solution that lets you instantly text customers their total.

Clients then finish up payment (and tip!) from their own phones. It’s device-free, easy, and secure.

The best part? Unlike Venmo, clients don’t need to have a special app to use it.

While Norm is similar to Venmo’s peer-to-peer technology, we designed our contactless payment system specifically for small businesses and their unique needs.

That means easy-to-read reports, flexible options to send the bill via QR code or text, and auto-suggested tips at check out.

*Our rate is dramatically lower than most competitors, including Square (2.9% + $0.30) and Stripe (also 2.9%+ $0.30). While it’s higher than the new Venmo for Business rate, Schedulicity offers all the perks, including reporting and unlimited phone and email support to help you through the payment processing application, any surprise chargebacks, and more.

“The ease of Norm for the way I do business, especially for collecting booking fees, is so much easier. It’s so nice to not awkwardly hand over my phone to get paid. Let’s get everything shifted over to Norm rates.” —Georgia, Esthetician

Standard Credit Card Payment Processors

If you’ve been using your personal Venmo account to accept payments, it’s likely time to pick any payment processor specifically designed for businesses.

From Square to Stripe, there are plenty of them out there.

Fees vary depending on which you choose and the type of transaction. (Here’s a handy payment processor comparison chart.)

And yes, you’ll ultimately pay more money to process your business transactions than under-the-table Venmo payments, but you’ll also do it safely and securely.


If you’re really hooked on the idea of offering Venmo payments to clients, then sure, PayPal is a good option for you. With Venmo payments built in, PayPal allows you to have it both ways — for a fee, of course. 

Final Takeaway

As the company expands its small business offerings, you might find it’s another viable option for you. Until then, Venmo is incredible, but use it for personal transactions and not business payments.

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