Venmo, Cash App & Zelle; Are They Right for Your Business?

Sending your business funds through Zelle, Venmo or Cash app? Not so fast. There are some factors you need to consider before transferring money this way.

Payment processors like Venmo, Cash app and Zelle are becoming popular options for making payments. If your business accepts either of these as a form of payment, use them carefully, and make sure they do not endanger your business. There are many factors to consider when using these services for your business, as these platforms can serve different purposes in the general market.

Fees

Zelle and Venmo are peer-to-peer payment services. They allow people to transfer money from one bank account to another without having to use a traditional bank transfer service. This means that they're not subject to the same regulations as other financial institutions, which is why there are limits on how much money you can send through these apps and why there are different fees involved when you open a business account through them.

Venmo business fees include 1.9% + .10 cents per transaction; Zelle does not have fees, but limits your monthly volume to $1,000 a day and $5,000 a month. Cash app is similar in some ways but different in others—it's more of a digital wallet than a peer-to-peer payment service (and it has no fees). It's still possible for businesses to use Cash app, but at an additional cost of 2.75% for business payments.

Tips/Gratuity

While fees are something to consider, if you're using Venmo, Cash app, or Zelle to accept payments from customers, you may also miss out on potential revenue.

The reason? These payment methods don't allow you to accept gratuity. When it comes to  your baristas or delivery drivers, they won't be able to accept a little something extra for their excellent service. This can be a big deal.

In fact, one study found that 70% of Americans tip regularly at restaurants and bars—and that doesn't include other business categories where tips are customary. If this is true for your business, you could be leaving money on the table by not accepting gratuity through a more robust payment method!

Enhanced Reporting

If you are in business, you probably already know that understanding your business' finances is essential to keeping you afloat. But what if your payment provider doesn't provide you with any reporting tools?

If you use Venmo, Cash app, or Zelle to accept payments from customers, you may have noticed that these services don't offer merchant reporting. This means that if you have questions about transactions — for example, when a customer disputes a charge or asks for a refund — you won't be able to get the answers you need. In business, reporting can help save you time, money, and keep you in business. The lack of reporting is one of the biggest frustrations for merchants who use these services to accept payments.

Tax reporting

Taxes are hard. We get it—you want to focus on running your business, not on tax returns. But if you don't report your earnings correctly, there's a chance you could end up owing more money than you need during tax time.

Things get tricky when you're using apps like Venmo, Cash app or Zelle. These services don't provide the tax reporting information needed for you to properly report earnings for your business. If you've earned income through these apps, it's important to be aware of the tax implications. The burden is on you, the business owner, to properly report your earnings to the IRS. Other payment providers typically provide you with a 1099-k for you to simply plug into your returns. Zelle, Venmo and Cash app may require you to filter through payments and transactions stemming from your business or personal use.

Availability

If you're using Venmo, Cash app or Zelle for your business, you may have noticed that it's difficult to get customers to pay this way. That's because these payment applications are not always available to your customer or the customer has no intent in using them for their daily use. This can cause a delay in their inability to pay, since they may not have these payment applications currently available.

Often, business owner must have an alternative payment option available to them in the case their customer doesn't have Venmo, Cash app or Zelle. Finding a payment provider that can help close this gap is very important for you and your customers. Fortunately, there is a payment provider that can help you provide your customers with an alternative payment method. Hi, we're Redde Payments and you should be using a payment provider that has it all.

Conclusion

You're a busy business owner. You don't have time to waste on your payment provider.

You need a payment processor that can help you manage all of your payments, including gratuity, enhanced reporting, and tax reporting.

Redde Payments is the perfect solution for your business. We make it easy for you to accept payments using our mobile app, mobile phone, in-store hardware, and even your website. With Redde, you can accept all major credit cards and even cryptocurrencies like Bitcoin! Get in touch with an expert today to see how we can help you accept payment anytime, anywhere!