The World Is Embracing Virtual Spending: Which Payment App Is Right for You?
While paying online has become easier and more accessible over the years, the COVID-19 pandemic took virtual spending to an entirely new level. As more and more people are embracing this type of spending, the payment options are growing.
How do you know which virtual payment option is right for you? Here are seven of the top apps (arranged in no particular order) available to most consumers right now.
Option #1: PayPal
PayPal has been around since 1998 and was acquired by eBay in 2002, making it the provider for eBay transactions. Users are typically not charged a fee when sending money to friends or family members, but a fee is charged if you send money from a credit card or convert any currency. Users can transfer money to any U.S.-based bank account plus several foreign ones.
PayPal Fees and Transaction Limits
There is no fee to open an account, but there may be a 2.9% processing fee per qualifying transaction. Users can send up to $60,000 through PayPal. However, they may be limited to sending $10,000 per single transaction.
Option #2: Venmo
PayPal owns Venmo, but there are some key differences between the two apps.
It is designed specifically for sending money between friends and family. Unlike PayPal, there is a social aspect to Venmo, as users are encouraged to include messages and emojis in transactions that can be seen by other users in your network.
Venmo uses encryption protocols to protect the personal and financial information of the users, with information stored on servers in secure locations. Additionally, you can set up a PIN code and multi-factor authentication for greater security.
While Venmo is primarily used on your mobile phone, the above security measures are put in place to allow users to receive and transfer money effortlessly and safely from their computers as well.
Venmo Fees and Transaction Limits
There is no cost to send money using your bank account, and users can pay for business transactions using this app. There is a 3% processing fee for qualifying transactions with a $299.99 spending limit for unverified users and less than $4,999.99 a week for verified users.
Option #3: Zelle
Zelle is a mobile app with a simple interface. As a user, you can send same-day money transfers to anyone who has an account with a participating bank, including:
- Bank of America
- Wells Fargo
- Capital One
Zelle has an app available for download on your phone. You can send money without the app, as well. Use your primary bank account when using Zelle, as you can only connect one account at a time using this app.
Zelle Fees and Transaction Limits
Zelle is free for the user. Banks are charged between $0.50 and $0.75 for each transaction. As far as transactions go, if your bank doesn’t offer Zelle, you can only spend $500 per week. If it does, you can spend up to $1,000 in 24-hours, $2,500 in a week, or $10,000 in a month.
Option #4: Apple Cash
If you have an iPhone, you can easily send or receive funds through Apple Cash. To use this app, simply:
- Open the messaging app
- Select or create a new contact
- Tap the Apple Pay icon at the bottom of your screen
Apple Cash Fees and Transaction Limits
There is a 1% fee deducted from each transfer, and you can send or receive a minimum of one dollar with a maximum of $10,000 in seven days.
Option #5: Cash App
Cash App, formerly known as Square, is now the number one finance app in the App store. A screen name called a $Cashtag is provided upon sign-up. You can easily find others using their phone number or email address. Using a linked bank account, Cash App allows you to send and request money virtually.
Cash App Fees and Transaction Limits
Cash App is free to set up, but each transaction will incur a 3% transaction fee if you pay with a credit card. It generally takes one to three business days to transfer funds to your bank account. If you prefer to receive your money instantly, expect a 1.5% transaction fee. You can send up to $250 within a 7-day period and $1,000 within 30 days.
Option #6: Google Pay
Formerly known as Google Wallet, Google Pay integrates with the G Suite account you may already have. It’s designed to work well with other Google products and services, making it easy and intuitive to use for those already accustomed to Google’s offerings.
Google Pay Fees and Transaction Limits
There are currently no fees to sign up to use Google Pay. Users are limited to sending up to $10,000 in a single transaction.
Option #7: Facebook Pay
Facebook is home to around 2.7 billion users. Facebook Messenger allows users to send money to anyone with an account, as long as their debit card has been connected. Once payment is accepted, it will appear in your bank account within five business days.
Facebook Messenger Fees and Transaction Limits
Facebook Pay has no fees and does not store money in an online account. There is no minimum amount that you can send or receive, and the maximum amount is $9,999.
From online shopping to splitting the bill at dinner, payment apps provide convenience and security when spending your money. With plenty of options to choose from, these tools can help streamline your payment methods for future transactions.
Erickson Braund is the Founder and Chief Financial Officer at Black Walnut Wealth Management. He is a Certified Financial Planner®️ professional and a Chartered Retirement Planning Counselor®️. Eric brings over 20 years of experience working with high net-worth individuals and families, helping them achieve their goals of protecting and growing their wealth for retirement and for generations to come. Because Eric is a CFP®️ professional, he adheres to high ethical standards and engages in at least 30 hours of approved continuing education in the financial industry each year.
Recent Insights from Black Walnut Wealth Management
- Your Summer 2021 Financial Update
- Retiring Soon? 5 Tips for Starting Your Business Transition Plan
- Improve Your Finances: Why A Digital Detox Can Save You Money
- Five Ways to Financially Empower the Women in Your Life, Including You
- Protecting What’s Yours After You Pass, Part 2: Step-by-Step Estate Planning
- Planning Inheritances for Your Children
- Have You Reevaluated Your Insurance Coverage Since COVID Began? If Not, Here Are 4 Areas to Review Right Now
- Personal Money Bias. What Can We Do About It?
- Protecting What’s Yours After You Pass
- Thinking About Moving Closer to Your Kids? Four Financial Implications to Consider