Traditional payment systems, such as Venmo, and blockchain-empowered cryptocurrencies, such as Bitcoin, are vastly different. In a nutshell, Venmo is a service that you can use to move your money, and Bitcoin is more like another currency in itself. Each has its pros and cons, and neither is better than the other.
Over time, we have discovered that when it comes to their money, most people prefer convenience and speed rather than where and how they transfer it between parties. That’s where these new money options have made their way into our everyday lives. They each offer a convenient, quick, and low-cost alternative to transfer money to and from other parties, replacing the slow and soon to be an outdated process of wire transfers, and perhaps even credit cards, cash, and banks themselves.
Should you be using one of these payment methods, and if so, which one? Here we will break down the fundamental differences between Venmo and Bitcoin, ultimately helping you determine which option may be the right fit for you or your business.
Venmo vs. Bitcoin: The fundamental differences
What is Venmo?
You may have heard the phrase recently, “I’ll just Venmo you for that.” Over the past couple of years, Venmo has taken a direction of its own and is already being used as a verb just like “Google” was in the early 2000s.
So, what exactly is Venmo? It’s a free-to-use service that allows you to transfer money between people and provides an app to make the process a breeze. You connect your debit card to your Venmo account, and your Venmo account then acts as the middleman by controlling your payment transactions. Your money is safe, your transactions are recorded immediately, and you can request your money back at any given time.
Businesses should keep in mind that Venmo can be an attractive option for consumers. Customers don’t need cards, checks, or cash to make a payment (quick!), and they can also easily split payments with their friends (convenient!). The app also connects users with their friends and family and shares a timeline of posts with their circle’s recent transactions. Users can see where their friends are shopping, giving businesses a free and useful marketing tool.
As of now, Venmo is only offering a connection to U.S. banks. While it has been promoted among consumers, businesses are beginning to get their own Venmo accounts.
What is Bitcoin?
Bitcoin opens the doors a little wider than Venmo’s “everyday” purpose. It is another form of currency rather than a simple service. For example, you can purchase Bitcoin with U.S. dollars, and then instead of U.S. dollars, you can transact with Bitcoin.
Being supported by blockchain technology, users can use Bitcoin, like Ethereum, Digibyte, and other cryptocurrencies, to conduct transactions with other parties around the world. Instead of using a third party to transfer currencies, the users themselves and authorized individuals they designate have access to their cryptocurrency wallet. This allows for true peer-to-peer transactions, cutting out the middleman entirely.
For businesses that operate internationally, using blockchain-empowered currencies can save both time and money. By transacting directly with the party you want to exchange payment, you can save enormous transaction fees that other third-party services may charge. It also lets you quickly send payments to other cryptocurrency merchants worry-free and securely. No more waiting around for banks to clear your checks and for money to be deposited. While there is still a slight processing time with Bitcoin, it’s as close as “instant” as you can get in today’s world of payment methods. There are some cryptocurrencies, such as Digibyte, that are even faster than Bitcoin and are growing in popularity.
Our thoughts on Venmo vs. Bitcoin
Both payment options have their pros and cons. We don’t think that one is better than the other, but they each offer different benefits. For example, cryptocurrencies like Bitcoin might make sense if you are conducting frequent international transactions. In other countries, where government currencies are not stable, you may find real benefits using a cryptocurrency alternative. You don’t have to worry about currency conversion rates.
On the other hand, if you are in the U.S. and looking for something on a smaller, more everyday scale, Venmo might be your answer. Service businesses, such as restaurants, hotels, and retail stores, might stand to gain the most from more traditional payment systems like Venmo. Consumers are looking for speed and convenience. Venmo provides that for all parties involved in a transaction.
Now that you know more about Venmo and Bitcoin, we are sure that you can assess which of these options might be the right fit for you or your business.
As always, you can trust us to provide you with valuable insights into the changing world around us.