Venmo Makes Crypto Access Available For Everyone

Venmo entered the US market in 2009, quickly gaining the hearts of users for its fast and easy money transfer system that arguably beats its biggest competitor, PayPal, for local transactions. Its business model revolved around mobile money remittance, taking advantage of the country’s high smartphone penetration (85%). In the last week of April, the financial giant announced that users can now buy, sell, and hold crypto through their Venmo accounts, making it the second money transfer company to embrace cryptocurrency integrations—with the first being PayPal’s bold move in October of 2020. 

Crypto And Venmo 

Venmo’s cryptocurrency integration is significantly more robust than PayPal’s initial rollout—but it’s only natural, considering how the company chose to wait until Q2 of 2021 before making the big announcement. Unlike PayPal, which only supports holding (and more recently, transacting), Venmo’s wide range of functions has turned it into both a wallet and an exchange. Users can buy and sell Bitcoin currency, Ethereum currency, Litecoin currency, and Bitcoin Cash—the common four—directly through the app without hindering its fiat capabilities, turning it into a coveted all-in-one platform for all forms of transactions. 

By using Venmo, users can essentially manage both their crypto and fiat funds and buy and sell as needed. The integrations were seamlessly added into the UI to offer a convenient and friendly cryptocurrency experience, especially to those new to the ecosystem. 

PayPal And Venmo

PayPal and Venmo’s cryptocurrency integrations are significantly different from each other. Whereas PayPal primarily functions as a wallet where you can hold and send crypto assets, Venmo’s platform offers full buying, selling, and wallet capabilities (but no sending feature)—making it the more advanced option between the two. However, a major downside is that Venmo only operates in the US. While PayPal hasn’t brought its crypto functions worldwide, its global platform enables it to expand, while Venmo currently only links to US mobile numbers and bank accounts. 

However, given how these two financial giants have entered the cryptocurrency sphere, others are expected to follow in the near future. 

How to Use Crypto on Venmo

Venmo’s cryptocurrency functions are extremely straightforward to use. First, users must verify their accounts through this verification process to unlock all the app’s fiat and crypto features. You can find the “crypto” button at the top-right corner of the app, which will redirect you to the cryptocurrency page, where all the integrations live. 

From there, you can choose to buy, sell, or manage your portfolio. Each user is limited to $20,000 in crypto transactions per week and $50,000 per year, and there is currently no way to transfer the coins to a different wallet, locking investors into the app. As a result, Venmo is only convenient for small-scale micro-investments and isn’t ideal if you intend to take crypto trading to the next level. 

Apart from the above, it’s important to keep the following points in mind before choosing to use Venmo’s cryptocurrency integrations: 

• Users are unable to use crypto funds to make purchases or transfers. These first need to be converted to USD. 

• A gas fee applies for every transaction, calculated based on specific details listed on their fees page. 

• Property taxes apply for cryptocurrency gains, but users will have to independently file these with the IRS. Venmo provides the necessary documentation for filing, all accessible through the app. 

The Impact of Crypto Integrations

PayPal and Venmo’s moves to accept cryptocurrency are major wins for the industry, as these platforms can reach millions of users worldwide. It’s difficult for an individual who hasn’t dipped into the world of coins to learn all the nuances of crypto wallets and exchanges. The graphs, financial data, and all the other high-level information make breaking into cryptocurrency investments extremely daunting, causing many to turn away before trying.

By offering a friendly approach to cryptocurrency through a familiar app, PayPal and Venmo can penetrate the crypto-curious market, motivating them to close their first trades in the most convenient way possible. This method makes the break-in process smoother and less intimidating, subsequently opening possibilities for greater mainstream adoption. 

Final Thoughts 

Venmo’s robust cryptocurrency integrations mark the first of many similar models to come as cryptocurrency continues to gain popularity across the globe. While the features are still rather sparse compared to traditional wallets and exchanges, the platforms may evolve into even more convenient and function-packed hubs for all-around fund and transaction management.