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Recently, Venmo added the ability to set up business accounts using their platform giving small business owners access to offering payments using Venmo (something they didn’t allow previously).
With it being a new feature, there isn’t a ton of info out there about how to properly set up a Venmo business account, how much fees are when using them, or if can have both a personal and business Venmo account (just to name a few things people often wonder).
In this post, I answer these and several other common Venmo business account-related questions.
In This Post:
- Can I Use Venmo for my Small Business?
- How Do I Set Up a Business Account on Venmo? (Step-By-Step)
- What Happens If You Use Venmo for Business?
- Is There a Fee for Venmo Business Accounts?
- Are There Limits for Using a Venmo Business Account?
- Can you have a personal and business Venmo account?
- How do I access my Venmo business account?
- Are Venmo business fees tax-deductible?
- Can I change my Venmo business name?
- How many Venmo business accounts can I have?
- Wrapping Up
Can I Use Venmo for my Small Business?
Venmo allows you to accept payments from customers for selling goods and services on the platform, so you have the option to use it for your small business. For freelance writers and craftsmen selling their services online, Venmo is an excellent choice to accept payments from customers.
Before you can use Venmo for your small business, you will have to turn your personal account into a business account. You don’t know how to do that, do you? It’s okay, and I will tell you how to in the next section.
How Do I Set Up a Business Account on Venmo? (Step-By-Step)
The steps to setting up a business account on Venmo are simple. If you’re new to using Venmo and don’t have an account with them, below are the steps you need to take to set up a business account:
- Go to the Venmo website on your phone or computer.
- Sign up for an account.
- While signing up for a Venmo account, you have the option to make it a personal one or a business one.
- Choose the “Business” option and follow the steps.
While setting up your business account, you’ll have to do a phone verification to finish the process. After that, you follow the steps to create a Venmo account and your Business profile. If you decide to do it later, you’ll have the option to do it in the App.
If you already have a personal account with Venmo, you can skip the steps above. Instead, on your phone, go to the Venmo app and tap on it to open. Next, go to your profile, and at the top of the screen, you will see “Create a business profile.” If you don’t see the option there, then tap on the gear icon or settings, and you will have the option to create a business profile.
After tapping on the business profile option, you’ll be prompt to follow the steps to switch your personal account into a business account. Some of the steps will include you answering the following questions:
- Does your business use SSN or EIN for identification
- What is the name of your business
- Provide a short description of your business
- Your business category
- Your business mailing address
- Social media accounts you’ll like for your customers to follow
Once done, you can view your business profile as a customer will see it. If you need to make any changes, you can go back to make updates.
Also, when creating your Venmo business account, you’re going to have to go through a verification process. Venmo does this to make sure your business is real and is not a scam.
So, you might have to turn in documents to finish setting up your business profile on Venmo. If you would like to read more on why Venmo will require you to verify your information, you can do so here.
What Happens If You Use Venmo for Business?
After you created your business profile and Venmo agrees to it, you can now start accepting payments from your customers. Venmo strongly discourages its users from using their personal accounts for goods, services, and merchandise payments. Using your personal account for business purposes may result in your account being frozen.
There’s also a risk of getting into trouble with the IRS if you use your personal account for business reasons. Of course, you do not want this to happen.
Taking the time to submit documents for your business profile is worth the effort. By creating a Venmo business account, you will be able to separate your business and personal transactions without running the risk of getting in trouble with the law. Again, this is something you do not want to happen!
Is There a Fee for Venmo Business Accounts?
Venmo business accounts come with a fee, and they can be expensive. A small transaction fee will accompany each transaction. Below are the fees for Venmo business:
- Using the Venmo app and a QR code, purchase transactions are 1.9% plus $0.10.
- Online purchases or in-app purchases made using the PayPal Checkout or Braintree gateway will be 3.49 % plus $0.49 per transaction.
Venmo’s rates are pretty good for in-person transactions, but they are high for online payments. So, the fees are quite expensive, but it’s the cost of being a business owner.
Now that you know one con of using a Venmo business account, let’s go over more. For one, there are limits on Venobusiness accounts on the amount of money you can send, receive, or transfer to your bank account.
For purchases, the following limits are:
- If your identity is verified, you can only send $24,999.99 per week
- If your identity is not verified, it’s $2,499.99 per week
If you’re trying to transfer funds to your personal bank account, here are the following limits:
- Identity verified: $49,999.99 per week
- Identity not verified: $999.99 per week
- Per transaction of instant transfers: $50,000
As you can see, it’s best to go ahead and turn in the documents to verify your business for a Venmo business account. Doing so will give more freedom to your transactions and transfer of money.
Now on to the other cons of using a Venmo business account. Below the negative to operating a business account are:
- If you accept in-person transactions, you will have to do the tax calculation yourself.
- It’s not a complete Point Of Sales (POS) service, so there are no tools for refunding, invoicing, or setting up recurring payments.
- If there’s a co-owner for your business, they can’t access the account. Only the person who created the account will have access.
- Not-for-profit businesses can not use Venmo business accounts.
The only place I see Venmo lacking is not offering a full POS service to its users. For example, the process of refunding or setting up recurring payments can be a headache. It’s nice to have something allowing you to do this with one click of a button.
In addition, if you want to accept payments online, you’ll need a PayPal or Braintree account. If these limitations do not bother you, go ahead and turn your account into a Venmo business account.
Yes, you can have a personal and business Venmo account. Actually, you can’t have a business account unless you have a personal Venmo account.
This is why Venmo takes you through the process of creating a personal account, before allowing you to create a business account. After completing your Venmo business account, you can switch between it and your personal one in the app.
The process of accessing your Venmo business account is very straightforward. To log in and access either profile, you’ll use your personal profile credentials.
Using the profile selector in the top-left corner, you can switch between your personal and business profile. If you’re on a computer, go to account settings and profile to find your business profile.
You might also be wondering, “How can customers find my business profile on Venmo?”
The Venmo app offers users the opportunity to search for “People” or “Business” to enhance visibility and refine their search results. If your customers are Venmo users, they can search for your business by using the business name or user name associated with the account.
You can deduct it from your taxes if you’re using Venmo to pay for business expenses. But, you’re going to need to provide documentation to the IRS to show the transactions were business-related. Examples include the following:
- Expense reports
As a business owner, it’s crucial you create a process to monitor your expenses. When you keep a detailed business-related record, you’ll be able to deduct these Venmo transactions:
- Advertising fees
- Home office supplies
- Internet monthly charges
- Processing fees
It is even possible for you to deduct what you pay independent contractors, but you will have to provide them with a 1099 Form since Venmo is not a Payment Settlement Entity. If you pay a contractor $600 or more for services, you must include them in your 1099-NEC Form. Also, before you pay them on Venmo, make sure they received and returned the W-9 Form.
If you want to change your business name in Venmo, the process will not be simple. You can not go into your business profile and change the name due to legal reasons. If for some reason, you decide to change your business name and have to do it on Venmo, you’ll have to contact support.
You can only have one business account associated with your personal banking account. If you would like to use Venmo for another business, consider having the business co-owner create a Venmo business account. As far as I know, the only way you can have two Venmo accounts is by having a personal account and a Venmo account.
As you can see, using Venmo business accounts does have its benefits. But, if your customers don’t use Venmo, you should have another option on how they can pay. If you would like to learn more about using Venmo for your business, be sure to read through their help guide or contact support.
Also, if you have any questions, you can always jot a quick message, and I’ll be happy to help you out the best way I can.