Venmo has become one of the most popular peer-to-peer payment apps, allowing users to easily send and receive money between friends or split bills.
With over 60 million active accounts, Venmo processes over $150 billion in payments annually. Recently, Venmo announced a new ‘Buy Now, Pay Later’ feature that allows users to split purchases into four interest-free payments over six weeks.
This has led many Venmo users to wonder – can you use Venmo’s Buy Now Pay Later feature?
If you’re short on time, here’s a quick answer: Not yet. At the moment, Venmo does not currently have a native Buy Now, Pay Later (BNPL) feature.
In this comprehensive guide, we’ll cover everything you need to know about Venmo’s Buy Now Pay Later offering, including how it would possibly work, eligibility requirements, costs, risks and alternatives.
What is Venmo Buy Now Pay Later?
Venmo Buy Now Pay Later would be a new feature offered by Venmo, the popular peer-to-peer payment app. With this feature, users will be able to make purchases and pay for them later in installments, similar to other buy now pay later (BNPL) services.
This feature aims to provide users with greater flexibility in managing their finances and making larger purchases without having to pay the full amount upfront.
Overview of the new BNPL feature
Venmo Buy Now Pay Later allows users to split their purchases into four equal payments, which are automatically deducted from their linked bank account or credit card.
This feature is expected to be available for purchases ranging from $100 to $2,500, allowing users to make both small and larger purchases with ease.
Additionally, Venmo will provide users with a clear breakdown of the total amount due and the due dates for each payment, making it easier to manage their finances.
How it compares to other BNPL services
Venmo’s Buy Now Pay Later feature brings it in direct competition with other popular BNPL services like Afterpay, Klarna, and Affirm. While the basic concept of splitting payments into installments remains the same across these platforms, Venmo’s advantage lies in its large user base and seamless integration with the app.
Venmo users will now have the convenience of making payments, splitting them into installments, and tracking their purchases all within the same app they already use for their everyday transactions.
In terms of fees and interest rates, Venmo has stated that they will be transparent and upfront about any charges associated with the Buy Now Pay Later feature.
It remains to be seen how these fees will compare to other BNPL services, but Venmo’s commitment to transparency is a positive step towards helping users make informed financial decisions.
Current status – coming soon in 2023
As of now, Venmo’s Buy Now Pay Later feature is not yet available, but it is expected to launch soon. The exact release date and further details about the feature are yet to be announced.
However, Venmo users can look forward to this exciting addition to the app, which will provide them with more options for managing their purchases and payments.
In the meantime, users can stay updated with the latest news and announcements regarding Venmo’s Buy Now Pay Later feature by visiting the official Venmo website or following Venmo’s official social media channels.
How Does Venmo Buy Now Pay Later Work?
Venmo’s Buy Now Pay Later (BNPL) feature allows users to make purchases and pay for them over a period of time, rather than all at once. This feature is designed to provide flexibility and convenience for users who may not have the funds to make a full payment upfront.
4 interest-free payments over 6 weeks
With Venmo’s BNPL feature, users can split their purchase into four equal payments, spread out over a period of six weeks. These payments are interest-free, meaning users won’t be charged any additional fees or interest for using this payment option.
Minimum and maximum purchase amounts
When using Venmo’s BNPL feature, there are minimum and maximum purchase amounts that users should be aware of.
The minimum purchase amount would might be around $30, while the maximum purchase amount can vary depending on factors such as the user’s creditworthiness and the merchant’s policies.
Signing up and getting approved
To use Venmo’s BNPL feature, users need to sign up for a Venmo account and link it to their bank account or credit/debit card.
Once the account is set up, users can check their eligibility for BNPL by going to the “Pay with Venmo” section in the app and selecting the “Buy Now Pay Later” option. Venmo will then conduct a review to determine if the user is eligible for the BNPL feature.
Making a BNPL purchase on Venmo
Once approved, users can start making BNPL purchases on Venmo. When checking out at a participating merchant, users can select the “Pay with Venmo” option and then choose the “Buy Now Pay Later” option.
The purchase amount will be split into four equal payments, with the first payment due at the time of purchase and the remaining three payments spread out over the next six weeks. Users will receive reminders and notifications to help them keep track of their payments.
It’s important to note that while Venmo’s BNPL feature can be a convenient way to make purchases, users should still be mindful of their spending and make sure they can afford the payments. It’s always a good idea to budget and plan ahead to avoid any financial strain.
Additionally, users should also be aware of any potential fees or penalties associated with late payments or missed payments.
Venmo Buy Now Pay Later Eligibility and Requirements
Requirements from Venmo
In order to use Venmo’s Buy Now Pay Later feature, there are certain requirements that need to be met.
First and foremost, you must have a Venmo account. If you don’t have one yet, you can easily sign up for free on their website or through their mobile app.
Once you have a Venmo account, you need to make sure that your account is in good standing. This means that you should not have any outstanding issues or negative account balances. If you do, it’s important to resolve them before you can take advantage of the Buy Now Pay Later feature.
Credit check needed
When it comes to using Buy Now Pay Later, Venmo does conduct a credit check. This is to ensure that you meet their eligibility requirements and can responsibly handle the credit that they provide. The credit check is done through a soft inquiry, which does not impact your credit score.
It’s worth noting that Venmo’s Buy Now Pay Later feature is not available to everyone. The credit check helps determine whether you qualify for this service or not. If you have a poor credit history or a low credit score, you may not be eligible to use this feature.
Minimum Venmo account history
Another requirement to use Buy Now Pay Later on Venmo is having a minimum account history. While the exact timeframe is not disclosed by Venmo, it’s important to have an established account in order to be considered eligible for this feature.
This helps Venmo assess your financial stability and the likelihood of you making timely payments.
Age minimum of 18 years old
In order to use Venmo’s Buy Now Pay Later feature, you must be at least 18 years old. This is to ensure that you are legally allowed to enter into financial agreements and take on credit obligations. If you are under 18, you will not be able to access this feature on Venmo.
It’s important to keep in mind that meeting the eligibility requirements does not guarantee approval for the Buy Now Pay Later feature. Venmo reserves the right to determine who can use this service based on various factors, including creditworthiness and account history.
Costs, Fees and Risks of Venmo BNPL
Using Venmo’s Buy Now Pay Later (BNPL) feature can be convenient and flexible, allowing users to make purchases and pay them off over time. However, it’s important to consider the costs, fees, and risks associated with this option.
No interest fees
One of the major benefits of Venmo’s BNPL feature is that it does not charge any interest fees.
This means that as long as you make your payments on time, you won’t incur any additional charges. It can be a great way to spread out the cost of a purchase without having to worry about paying extra.
Possible late fees
While there are no interest fees, it’s crucial to note that Venmo may charge late fees if you miss a payment or pay past the due date.
These fees can vary depending on the amount owed and the length of the delay. It’s important to stay on top of your payment schedule to avoid any additional charges.
Risk of overspending
One potential risk of using Venmo’s BNPL feature is the temptation to overspend. It can be easy to get caught up in the convenience of making purchases without immediate payment.
However, it’s essential to remember that you will still need to pay off these purchases eventually. It’s important to budget and make sure you can comfortably afford the payments before making a purchase.
Impact on credit score
Using Venmo’s BNPL feature does not directly impact your credit score. Venmo does not report BNPL transactions to credit bureaus.
However, if you miss payments or default on your payments, it could have a negative impact on your creditworthiness in the future. It’s important to use this feature responsibly and make your payments on time to maintain a good credit standing.
Venmo BNPL Alternatives
Other BNPL services – Affirm, Afterpay, Klarna
If you’re looking for alternative Buy Now Pay Later (BNPL) services to Venmo, there are several options available in the market. Some of the popular ones include Affirm, Afterpay, and Klarna.
These services allow you to make purchases and pay for them in installments over time, without any interest or fees if you make your payments on time. They offer flexibility and convenience, making it easier for you to manage your finances.
Credit cards with 0% intro APR
Another alternative to Venmo’s BNPL feature is to use credit cards that offer a 0% introductory Annual Percentage Rate (APR). These credit cards allow you to make purchases and pay them off over a certain period of time without incurring any interest charges.
It’s important to note that the 0% APR period is usually limited, so make sure to pay off your balance before the promotional period ends to avoid high interest rates.
If you’re looking for a more traditional financing option, you can consider taking out a personal loan. Personal loans offer a fixed amount of money that you can use to make purchases and then repay over a fixed period of time, typically with a fixed interest rate.
Personal loans can be a good option if you need to make a large purchase and want the flexibility to pay it off over time.
Using a budgeting app to save up
If you prefer to avoid borrowing money altogether, you can use a budgeting app to help you save up for your desired purchase. Budgeting apps like Mint, YNAB (You Need a Budget), and PocketGuard can help you track your expenses, set savings goals, and create a budget that allows you to allocate funds towards your desired purchase.
By saving up in advance, you can avoid interest charges and the need for BNPL services.
Venmo’s new Buy Now Pay Later feature provides an easy and convenient way for users to split purchases into four interest-free installments over six weeks. While the service isn’t live yet, it has the potential to become a popular BNPL option given Venmo’s huge user base and wide merchant acceptance.
However, customers should weigh the risks, such as possible late fees and overspending, before using BNPL services. Those with existing debt or looking to build their credit may be better served using a credit card or alternative.
We’ll have to wait and see how Venmo’s BNPL service competes once it officially launches.