Venmo, with its free services, is rapidly becoming the go-to money-transfer platform between peers.

Owned by PayPal, Venmo costs nothing to use if you are moving funds from a bank account, debit card or prepaid card. Transfers from a credit card have a fee of 3 percent. Exchanging money through Venmo is becoming so popular that its name is often used a verb, as in “I’ll Venmo you some money for that.”

More than 91 million people are expected use peer-to-peer money transfer services by 2019, an increase from 31.4 million in 2015, according to eMarketer. And Venmo and PayPal, which acquired Venmo in 2013 as part of its $800 million buyout of Braintree, dominate this market. Together, they have about 210 million active accounts. (See also: PayPal Inks a Slew of Payment Deals.)

Venmo is straightforward and simple to use. Its features are similar to those of PayPal, with a user setting up an account and connecting a bank account or credit card. First, download either the iOS or Android app and create a password. Verify your email and phone number and then connect your financial accounts.

Sending and Requesting Payments

To send or request a payment, simply open the app and tap the “pay or request” button and enter the person who you’d like to send the transaction to, along with the amount. The moment you send funds to someone, the money is deducted from your account. At this time, you cannot cancel a transaction. Transfers are limited to $2,999.99 per week. (See also: How is Venmo Save and Why is it Free?)

Like PayPal, Venmo transactions can be kept as a balance within the app to use for other transactions or cashed out as a balance. Bank-level security features and data-encryption help keep transactions safe. Users can also set up a PIN code for an extra layer of security.

Venmo’s popularity is also due in part to the speed of the transaction. While other payment systems can require from five to seven days to complete, a transaction on Venmo is usually complete within one or two business days, depending on the bank.

Special Features

While Venmo gets revenue from the 3 percent it charges on credit card transactions, its numerous free services have kept it from making a profit. Instead, PayPal values Venmo for its broad reach, especially among millennials.

Venmo is a more social platform than PayPal. Users can send messages and emojis with their payments and build up a circle of contacts. They can also view each other’s activities or they can chose to keep theirs private. (See also: New Help for the Millennial Money Dilemma.)

Venmo continues to tweak and add to its features with a goal of improving convenience. It recently rolled out a QR code feature in which users can use their phone camera to scan a code and find a contact. The unique code can be posted into email, iMessages, social networks or other apps for your contacts to connect to your Venmo profile.


Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.