Venmo notified users in an email last month about some changes to its User Agreement. I didn’t read it. I’m guessing most of you didn’t either and have never read the agreement.

But this week, I received an email about it from someone who provides private lessons to one of my children. The message related that Venmo would start attaching a fee for those who paid for goods and services through its app, even on a personal account. For those paying the teacher via Venmo, the email asked them not to include what the payment was for in order to avoid the fee. Instead of a description, the email encouraged us to use an emoji.

First of all, is this honest? And secondly, will using an emoji actually bypass the fee?

In a June 28 press release, the company introduced the fee by explaining it would roll out expanded purchase protections over the coming weeks.

“Payments tagged as for goods or services will be eligible for coverage under Venmo’s Purchase Protection Program, meaning the buyer and seller may be covered if the transaction doesn’t go as expected,” it reads.

Venmo points out the new protections will be ideal for those who occasionally sell a higher priced item or service to someone they don’t know. 

Any transaction labeled as “goods and services” by toggling a button on the payment screen will charge the seller 1.9% + $0.10 on that transaction.

I have long used Venmo to pay for all sorts of services like haircuts, snow removal and home improvement. It’s also my go-to when buying or selling used items. I figured someone offering a service would have a business account if it was indeed their business. And since I didn’t consider selling my used toys and home decor as a business, setting up a business account for myself never crossed my mind.

Turns out Venmo has its own ideas about what transactions should be considered business.

The company’s User Agreement details that personal accounts “may not be used to conduct business, commercial or merchant transactions with other personal accounts, which includes paying or accepting payment from other personal accounts held by users you do not personally know for goods or services.”

It gives examples of such banned transactions, mentioning selling concert tickets or sneakers, deposits for apartments or charging for dog walking.


Venmo considers those transactions OK on personal accounts if the buyer designates the payment as one for goods or services. It’s also fine as long as the seller has a business profile.

The company says if businesses accept payments for goods and services on a personal account, the activity could lead to restrictions on that Venmo account.

Are credit cards from Apple, Venmo or Amazon worth it?

Business accounts have long been charged a 1.9% + $0.10 transaction fee for any payment received that is more than one dollar. Venmo says a business profile has several advantages including the ability to reach a wider audience through the app, ease with tax reporting and disputes services.

Certain purchases for goods and services are eligible for the Venmo Purchase Protection Program, but only if they are identified as such or are paid to a business profile. For buyers, that means they could get a full refund if they don’t receive an item, or it isn’t what they ordered. Sellers could retain the full purchase amount, minus fees if a buyer claims they didn’t receive an item or service for which they were charged. Only Venmo decides whether a disputed claim is eligible for the Purchase Protection Program and which party will be the beneficiary.

So yes, there are benefits to both buyers and sellers for correctly noting whether a transaction was for a good or service.

And also, it’s true that Venmo is making a lot of money by charging those fees.

Buyers could possibly help sellers and small businesses (in some cases) skirt the 1.9% transactions fee by declining to truthfully describe the purchase as “goods and services” or by using an emoji.

Venmo hasn’t said how strictly they will monitor sales not flagged as “goods and services” to catch people trying to avoid the fee.

But, remember Venmo is providing a very convenient service to its users. It is offering businesses yet another way for customers to make purchases. It allows millions of people the ease of buying and selling goods and services without writing a check, handling cash or swiping a credit card.

It doesn’t seem honest or fair to deny a business a small fee for providing a method of payment that has definitely made my life easier.

But in the end, the decision on whether you use a winky emoji in a purchase description instead of noting the payment was for your eyelash refill is completely up to you.