Most people these days have a small business or a side hustle. If you don’t, I can almost guarantee that you purchase services or goods from someone who does. I’d estimate that about 75% of my friends either have a side hustle in addition to their full time job, or a small business as their full time job.
Why am I so concerned with just how many people are involved with these? Venmo’s recent updates.
For small businesses and side hustles, using a personal Venmo account has been an easy and quick form of payment, without any additional fees. Now, Venmo will be adding a fee for goods and services sold through the app. According to USA Today, “Beginning July 20, sellers who receive payment for goods and services will pay 1.9% of the payment plus $0.10.”
If a user adds a “goods and services” tag to a transaction, this fee and deduction will be added. On one hand, sellers are frustrated that this will make it more expensive for them to operate through Venmo. However, Venmo is focusing on the advantage of the added protection it will give to both sellers and buyers.
Per Venmo’s User Agreement, the Venmo Purchase Protection Program may entitle buyers to a “refund of the full purchase price of the item plus the original shipping costs … paid, if any.” For sellers, the program entitles them “to retain the full purchase amount (less any fees we charged) from a sale.”
While many may stick with the app, and either take the additional cut on net profits, or increase their pricing to cover the difference, many are taking steps to move away from the app entirely.
We are only a few weeks into the update, but as Vox mentions, “…the platform’s changes come as lots of different payment apps, including CashApp, Zelle, and Shopify, continue to compete for transactions.”
Will this change affect you? Or a local small business that you support? Is Venmo boosting profits, or protecting users? Interested to see how this plays out over the next few months, only time will tell!