Venmo Rolls Out Business Profiles for Micro Sellers

Has the pandemic encouraged you to spend more time with your creative side? Perhaps you finally launched an Etsy seller account, or are leveraging Facebook to hock a few art pieces finished during the past few months.

Or, maybe you’re a writer and need a simplified way to get paid by equally small clients. Who wants to wait for checks in the mail?

Or… shhhh… you’re already collecting Venmo “business” payments through a personal profile.

Direct payments for sole proprietors can be confusing. Most wind up using their personal accounts, but that's an issue when tax season comes. Commingling personal and business funds can get you in serious trouble. I’ve been audited, and it was one of the first things looked for.

Venmo is fixing the problem.

Soon small sellers and sole proprietors seeking immediate payments will be able to take Venmo. The peer-to-peer payment app launched its Business Profiles feature to a select group of indy sellers.

Artists, crafters, and personal instructors, to name a few, are testing the feature before it rolls out to the masses. Currently, sellers pay no fee to accept payments, but this will likely change to amount to the standard 2% to 3%, plus a transaction fee.

Business Profiles isn't just an upgrade from a personal account. It's a separate profile, and Venmo says sellers can toggle between the two.

While payment and bank transfer limits will apply to both personal and business accounts collectively, Business Profiles has some much-needed features:

• You’ll have unique usernames for each profile, but you can toggle between accounts. Your existing username can be used for the business account.

• You can transfer funds from business to personal (you know, so you can pay yourself!).

• You can select a business category, which indicates Venmo will be publishing a list of business users.

• You can earn a “Popular among Venmo customers” label. The designation is added and removed automatically based on your customer base and other factors.

• You’ll receive the all-important 1099 you need for filing your income tax return. Use this in conjunction with itemizing all your expenses.

To see if you’re eligible for a business account, go into your app’s settings. If you qualify, you’ll see a Business Profiles option.

How Venmo works

The social money app is most popular amongst millennials, who use it for everything from splitting restaurant checks to sending gifts and repaying loans. Since funds are available to use immediately within Venmo, it's used for people to pay for all sorts of things. I use Venmo regularly to tip musicians who stream on Facebook Live.

Venmo accounts are initially funded by either a bank account or someone else sending funds through the app. There's no charge to transfer funds to and from a bank account, but funding with a credit card costs an extra 3%.

So, it’s like PayPal?

Kind of, but not really. While Venmo is a PayPal company, the services are different.

PayPal is both web- and app-based. It can be used by both individuals and big businesses. PayPal supports paying others via PayPal funds or a credit card.

While PayPal has a mobile app, it’s not a socially-driven mobile payment solution. It’s also not as quick and easy to use as Venmo.

PayPal is a viable inline payment method for online stores. Venmo is not.

Support for bigger businesses

There's no word yet if Venmo will unlock Business Profiles for brick-and-mortars or larger-scale businesses. Currently, the only way for customers to pay companies via Venmo is by first initiating the transaction via PayPal. Hopefully, this will change, because the ease of Venmo would be quite welcome at local shops, trade shows, and events.

For now, Venmo’s Business Profiles is all about the littlest guys. And it couldn’t have come at a more perfect time.