The claim: Venmo is giving away $100,000 to distract from its new transaction fees
Venmo users splitting a dinner bill, chipping in for a gift or paying back a pal can quickly transfer money.
But the digital payment app’s announcement in late June that it was changing some fees sparked criticism. The announcement came around the same time the company ran a $100,000 giveaway on social media.
“Venmo is giving away $100k to distract you from their announcement of charging transaction fees,” a meme shared June 28 on Instagram claims.
The promotion came four days after the company announced changes to transactions fees, but USA TODAY could find no evidence the two were connected.
The meme also leaves out key details about the changes. They don’t affect the basic person-to-person transactions, only business charges and transfers that quickly move money from Venmo accounts to a debit card or bank.
The user who shared the meme did not respond to a request for comment.
“This claim is factually inaccurate as Venmo’s recent marketing campaigns have no correlation to our long planned expansion of purchase protections for goods and services,” Venmo spokeswoman Caitlin Girouard said in an email. “These buyer and seller safeguards, similar to existing user options on the PayPal platform, are completely voluntary and designed to protect customers and their purchases.”
Venmo sent users an email on June 24 alerting them about upcoming changes to the app, including updates to the fees charged for goods and services and charges for “instant transfers.”
Starting July 20, someone paying for a purchase through Venmo will be able to note that the transaction was an exchange of goods and services, according to the email.
If the buyer selects that option, the seller receiving the payment will be charged a transaction fee of 1.9%, plus an additional 10 cents, according to Venmo, which is owned by PayPal.
The transaction fee already was charged to sellers using a business profile, according to the Wall Street Journal, but Venmo’s rules barred business transactions on personal accounts. The change will make it OK for someone to use a personal account to sell goods and services.
With that change, transfers tagged as an exchange of goods and services also will be eligible for Venmo’s Purchase Protection Program if something goes wrong in the transaction, according to a company press release.
The fee would not apply to users transferring money that wasn’t an exchange of goods and services.
The company also announced it was raising the fee for “instant transfers,” which the company says can typically shift money from a Venmo account to a debit card or bank account within 30 minutes.
The current fee for an instant transfer is 1%, with a minimum of 25 cents and a maximum of $10. The fee will increase to 1.5%, with a minimum of 25 cents and a maximum of $15 starting Aug. 2.
The app also offers a free electronic withdrawal that takes up to three business days.
Our rating: Missing context
The claim that Venmo is giving away $100,000 to distract from its new transaction fees is MISSING CONTEXT, based on our research. Under the new structure, users will be able to sell products and services on personal accounts for a fee that previously was reserved for business accounts. It also is raising the fee to quickly move money from a Venmo account to a bank account. Person-to-person transfers still don’t involve fees. And there’s no evidence the fee changes are related to the $100,000 giveaw
Our fact-check sources:
- Instagram, June 28, Venmo $100,000 giveaway
- Venmo, June 24, Email to users about “New and upcoming changes to Venmo”
- The Wall Street Journal, June 26, Venmo to Charge Users for Selling Goods and Services
- PayPal, June 28, A New Way to Buy and Sell with Confidence on Venmo
- Venmo, accessed July 2, Instant Transfers FAQ
- Venmo, accessed July 2, Answers about Venmo account fees
- Gizmodo, June 27, Venmo Will Start Letting You Sell Stuff Through Your Personal Account (for a Price)
- WKYC, June 28, Verify: Yes, Venmo is giving away $100,000 today on Instagram and Twitter
- Venmo spokeswoman Caitlin Girouard, July 2, email to USA TODAY
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Our fact-check work is supported in part by a grant from Facebook.