Venmo, an innovative financial app, offers a wide range of features, including peer-to-peer (P2P) money transfers and cryptocurrency transactions. Serving as a comprehensive tool, Venmo allows users to easily handle transactions and even engage in digital currencies like Bitcoin (
BTC
). The app is designed to simplify financial operations and assist users in navigating the modern economic landscape.
What is Venmo?
Venmo, a mobile payment service established in 2009, has been owned by PayPal since 2013. It operates as a platform for P2P money transfers within the United States. The social payment app facilitates money exchanges between users and businesses. It also functions as a digital wallet, allowing individuals to accumulate funds within their Venmo accounts for future expenses.
Venmo has expanded its capabilities by integrating cryptocurrency transactions, enabling users to buy, sell, and hold digital assets within the app. This feature was introduced in April 2021, following a similar initiative by its parent company, PayPal. Venmo users in the U.S. (excluding Hawaii) can engage with four cryptocurrencies: BTC, Ether (
ETH
), Litecoin (
LTC
), and Bitcoin Cash (
BCH
). In the future, Venmo plans to incorporate the PayPal USD stablecoin (
PYUSD
).
Buying Bitcoin with Venmo
To purchase Bitcoin with Venmo, users can use their Venmo balance, bank account, or debit card, among other payment methods. However, it’s important to note that credit cards and Venmo Credit Cards cannot be used for these transactions. Additionally, users are restricted from making crypto purchases through Venmo. There is a weekly cap of $20,000 and a yearly cap of $50,000 for crypto acquisitions.
Since cryptocurrencies are digital currencies, buying them involves exchanging one currency for another. The exchange rate determines the amount of Bitcoin users receive in exchange for U.S. dollars. It’s important to keep in mind that cryptocurrency values are highly volatile and change frequently.
Steps to buying Bitcoin through Venmo
1. Open the Venmo app and go to the “Crypto” tab at the bottom of the menu.
2. Select “Bitcoin (BTC)” from the list of cryptocurrencies. The current exchange price of Bitcoin is also displayed on the page.
3. Click “Buy” at the bottom of the page.
4. Enter the dollar amount to buy in BTC and tap the “Review” button. This step confirms purchase details, such as bank account, exchange rate, and transaction fee, before finalizing the transaction.
5. The app will provide a breakdown of the amount of Bitcoin to be purchased, along with any associated fees.
6. Once satisfied with the details, tap the “Buy” button to complete the Bitcoin purchase through Venmo.
After a purchase is completed, crypto acquired through Venmo becomes irreversible. This means that users have to sell their digital currencies to convert them back to U.S. dollars. It’s also important to note that Venmo does not provide compensation for any losses caused by price fluctuations.
After successfully purchasing Bitcoin through the Venmo app, users can conveniently track its price fluctuations within the app itself. The app also provides historical price data for the selected cryptocurrency, including past transactions involving that digital asset.
Steps to track the current market price of Bitcoin in Venmo
1. In the Venmo app, go to the “Crypto” tab.
2. Select “Bitcoin.”
3. Activate price alerts using the Price Alerts toggle.
4. Once activated, specify the desired percentage for price fluctuations, which can be adjusted as needed.
Venmo fees for purchasing Bitcoin
Acquiring cryptocurrencies through Venmo incurs fees based on the size of the purchase, with transparent fee disclosure during transactions. These fees include the spread between the market price from Venmo’s trading service provider, Paxos, and the USD-to-crypto exchange rate, along with a transaction fee associated with buying crypto assets. Venmo discloses both rates during crypto transactions, with an estimated 0.50% spread, subject to market conditions.
It’s important to note that Venmo does not provide specific details about the spread earned on each transaction. By using Venmo’s crypto services, users agree to cover all relevant exchange rates, including the spread and associated fees.
Additionally, if a linked bank account or debit card is used as the funding source for purchasing crypto assets, additional bank fees, such as overdraft charges, may apply. Venmo does not bear responsibility for these bank-imposed fees, so it’s important to understand a bank’s fee policies when using these funding sources for crypto transactions.
Who can buy Bitcoin with Venmo?
To buy Bitcoin with Venmo, users must meet certain criteria:
– Age requirement: Users must be at least 18 years old.
– Location: Cryptocurrency services are available to users physically present in the U.S., except Hawaii.
– Payment methods: A Venmo balance, bank account, or debit card is required.
– Unique cell phone number: Users need a unique U.S. cell phone number not associated with another Venmo account.
Anyone who meets these requirements is eligible to create a Venmo account and proceed with acquiring Bitcoin. To access cryptocurrency transaction services on Venmo, a user’s identity must be verified. This verification process includes providing essential information such as a Social Security number or an Individual Taxpayer Identification Number. These services are exclusively available for personal Venmo profiles and are not supported for business or charity profiles.
Price Alerts in Venmo
To stay informed about Bitcoin market movements, Venmo’s Crypto Price Alerts can assist in monitoring and responding to crypto price fluctuations, helping users make timely and informed decisions in this dynamic financial landscape. When crypto price alerts are activated, push notifications will be sent when the selected cryptocurrency’s price experiences a daily percentage change.
It’s important not to rely solely on price alerts for cryptocurrency-related decisions. Crypto price alerts may experience delays or disruptions due to market conditions and data interruptions. Therefore, it is advisable to verify any information received through a price alert before making decisions.
To set up Bitcoin price alerts in Venmo:
1. Go to the “Crypto” tab in the Venmo app.
2. Select “Bitcoin.”
3. Activate price alerts using the Price Alerts toggle.
4. Once activated, specify the desired percentage for price fluctuations, which can be adjusted as needed.
Security and safety measures in Venmo
Venmo utilizes data encryption technology to protect users from unauthorized transactions, ensuring that user information is securely stored on protected servers. The mobile payment service also offers features such as logging out of Venmo accounts on lost or stolen phones, setting up personal identification numbers (PINs) for mobile applications, and enabling two-factor authentication (2FA).
Despite Venmo’s security protocols, users should be aware of potential risks, including scams and fraud by cybercriminals. While these risks may not be attributed to the payment app itself, they can directly impact Venmo users. Therefore, it is crucial to never share login details, use strong passwords, set accounts to private, and only transact with trusted individuals and businesses.
According to research findings, Venmo publicly reveals all peer-to-peer transactions by default, except for the transaction amount, which could potentially disclose sensitive user information in certain cases. In 2018, the company reached an agreement with the Federal Trade Commission to address multiple privacy and security concerns related to this and other aspects, leading to corresponding setting adjustments. However, Venmo has still faced scrutiny for potentially exposing users to privacy vulnerabilities.
Drawbacks to buying Bitcoin with Venmo
Buying Bitcoin through Venmo has certain drawbacks to consider. Firstly, Venmo’s Purchase Protection does not cover cryptocurrency purchases, leaving users vulnerable to losses resulting from cryptocurrency price fluctuations. While unauthorized activity is protected, Bitcoin transactions on Venmo are irreversible, emphasizing the need for thorough research and cautious decision-making.
Unlike traditional banks, Venmo does not provide protection for Bitcoin and investment balances through the Federal Deposit Insurance Corporation (FDIC), Securities Investor Protection Corporation (SIPC), or any other public or private insurance. As a result, funds held within the app are not protected as they would be in a bank account, making Venmo an insecure choice for storing substantial cryptocurrency holdings.
Additionally, any currency or asset acquired on Venmo remains limited to the platform, making it impossible to transfer crypto to other platforms or personal accounts. This limitation can be restrictive for those who prefer to hold their coins in digital wallets or explore different trading options.