There are a lot of different options for buying bitcoin. You are probably familiar with some of these payment methods, such as buying from an exchange with a debit or credit card.
New ways of buying bitcoin continue to pop up. Did you know that you can also buy bitcoin with Venmo?
At first, you may think of the two as rivals. Bitcoin bills itself as “a peer-to-peer electronic cash system,” while Venmo is a peer-to-peer payment service owned by PayPal.
You can make the two work together, though. To buy bitcoin with Venmo, you will also need a peer-to-peer exchange such as LocalBitcoins.com.
Understand the Risks
There is a lot of risk in buying bitcoin with Venmo. Buying anything with Venmo is risky; the platform has a problem with fraud.
Venmo’s website spells it out pretty clearly:
“Venmo is designed for payments between friends and people who know and trust one another…Venmo may not otherwise be used to receive business, commercial, or merchant transactions, meaning you CANNOT use Venmo to accept payment from (or send payment to) another user for a good or service.”
“DO NOT USE VENMO TO TRANSACT WITH PEOPLE YOU DON’T PERSONALLY KNOW.”
If you trade with someone you do not know, know that you could be violating Venmo’s user agreement, unless this person has an “Approved Business Account.”
If you violate the user agreement, Venmo probably won’t offer much help if you run into trouble.
However, if you’ve linked a debit or credit card to your Venmo account, the card issuer may help you reverse the transaction later on if you fall victim to fraud.
Buying Bitcoin on Venmo, Step by Step
Once you understand the risk involved, if you still want to use Venmo to buy bitcoin, here’s how to get it done.
Step 1: Go to a Peer-to-Peer Exchange
These include LocalBitcoins.com, paxful.com, cointal.com, and others.
Step 2: Create an Account
If you already have an account on a website like LocalBitcoins.com or Paxful.com, you can skip this step.
The exchange may need you to verify your e-mail and phone number, and/or an ID card such as a driver’s license.
Step 3: Find a Seller
Now you need to find somebody on the website willing to sell bitcoin to you. Click “Buy bitcoins” in the top left corner.
Then choose Venmo as your payment method. Click the menu bar that says “All online offers” and scroll down, selecting Venmo.
At the time of writing, we checked both LocalBitcoins.com and paxful.com and could not find any sellers accepting Venmo on either site.
You could also post a buy order:
Step 4: Execute the Trade
If you find someone willing to sell, click “Buy”.
(Note: The people listed here were not willing to sell using Venmo.)
That will take you to this page. Here you can contact the seller.
After you send the trade request, the seller will give you his or her payment information. If you find a seller willing to accept Venmo, the seller will give you a Venmo address.
Once the seller receives money from you, he or she will release your coins.
The coins will be added to your LocalBitcoins wallet. You can then transfer the coins to your Coinbase account or to a paper wallet.
If you don’t receive the coins, you will need to dispute the transaction. Remember, though, that Venmo probably won’t help much since you may have violated the user agreement. If you’ve linked your Venmo account to a credit or debit card, the issuer might help reverse the payment.
You can also report fraud to LocalBitcoins.
A Possible Alternative
Buying Bitcoin with Venmo is possible, although it is difficult.
However, Venmo is not the only app for peer-to-peer payments. There’s also Zelle, which is owned by several banks, and Square’s Cash app.
According to eMarketer, 22.9 million people in the U.S. used Venmo in 2018, with 9.5 million using Square Cash.
Square Cash makes buying bitcoin incredibly easy. Your bitcoin balance is displayed directly below your cash balance.
PayPal and Square have very different attitudes toward bitcoin. Square’s founder and CEO, Jack Dorsey, is bullish on bitcoin and expects it to become the world’s currency. PayPal CEO Dan Schulman, on the other hand, has called the digital currency “unsuitable.”
The Bottom Line
Though it is possible to buy bitcoin with Venmo, it is not the easiest or safest way to purchase the digital currency. Venmo might be an acceptable choice if you know the seller personally, but if you do not, you are likely leaving yourself vulnerable to potentially fraudulent activity.
Taking steps to ensure the security of your digital currency transactions is always the smart way to conduct business. To stay abreast of what is happening in the digital currency space, join our vibrant community of crypto enthusiasts by subscribing to the Bitcoin Market Journal newsletter today!