Sunday, April 14, 2024

Venmo’s new charges for goods and services may hurt small businesses

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Venmo is changing the way its fees operate. The new model will not affect everyone, but if you have been using a personal Venmo account for side business, it will become more expensive.

The company recently Tell its users They will soon be able to add the “goods and services” label to payments sent to other personal accounts (this distinguishes these payments from personal financial transactions, such as repaying a friend’s dinner).In other words, this allows the buyer to mark a commercial transaction with the seller, while the seller does not Have a Venmo business accountThis means that Venmo will automatically deduct 1.9% of the transaction from the payment sent to the seller, plus 10 cents, and the buyer will be eligible for Venmo’s purchase protection program.Certain purchases made through a Venmo business account Already accessible To this app.

Venmo said its new system is designed to protect buyers and sellers. But sellers who will be affected by these new rules say that Venmo is hurting their relationship with customers and making them more expensive to operate on the platform. Now sellers are trying to figure out the next step, and some sellers are considering leaving the app forever.

“As Venmo launches new experiences, we are also seeing increasing consumer demand for safe and simple solutions in the market that enable people to buy and sell other items or experiences that may not be part of the traditional business environment,” The company told Recode.

Venmo purchase protection plan as described in Venmo Updated user agreement, Sellers who use personal accounts will be required to maintain sales documents. If the customer does not receive what they paid for, or is significantly different from what they ordered, Venmo may step in and refund. The new user agreement will take effect on July 20 and will give Venmo buyers more power. But it also assigns more responsibilities to sellers and represents a step away from the arbitrariness associated with Venmo transactions for a long time.

For small businesses and part-timers that rely on Venmo, the policy change complicates their transactions—and may cost them a lot of money on new fees. Now, sellers are trying to figure out how to adapt to the new rules. Some people may bite the bullet and accept the new fees.But others are considering other options, such as urging customers not to mark As a “goods or service” transaction. Some people may abandon Venmo altogether and switch to other payment applications.

Some of these sellers seem to think that Venmo’s new features are not so much for convenience as for combat. In the past, Venmo has suspended or terminated personal accounts suspected of selling goods and services; now it seems to be looking for ways to make money from these sales.This change has frustrated sellers, some of whom have taken Social media to complain Regarding these changes, the company is accused of trying to increase profits by charging people with side businesses and small businesses.

Venmo believes that the new system is designed to protect transactions between buyers and users who may only occasionally sell goods and A blog post The company stated in a statement released on Monday that the new payment protection will mean that sellers have the right to be protected in situations where, for example, buyers claim that they did not receive what they paid for, but sellers can prove that they sent it. Venmo’s new system Imitation method Is already in place in Paypal, where Acquired Venmo in 2013.

It remains to be seen how Venmo’s new fees will affect small merchants, who have less than a month to prepare. Nevertheless, as many different payment applications (including CashApp, Zelle, and Shopify) continue to compete for transactions, changes to the platform have followed. The new fees also remind people that companies can attract a large number of users through an easy-to-use platform, just by changing the rules.

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