Tech

Venmo’s new spending on goods and services can hurt small businesses

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Venmo changes the way they work their rights. The new model won’t affect everyone, but if you use your personal Venmo account for your side-scrolling, it’s on track to become more expensive.

The company recently did said its users they will soon be able to add a “goods and services” tag to payments sent to other personal accounts (this will differentiate these payments from personal financial transactions, such as reimbursing a friend for dinner). In other words, this allows a buyer to flag a business transaction with a seller who does not have a Venmo Business account. Doing so would mean that Venmo would automatically deduct 1.9 percent of the transaction, plus 10 cents, from the money sent to the seller, and the buyer would be eligible for Venmo’s Purchase Protection Program. Some purchases are made with Venmo Business accounts they already have access to this program.

Venmo says its new system is designed to protect buyers and sellers. But sellers who will be affected by these new rules say Venmo is hurting its relationship with its customers and that it makes it more expensive to operate on the platform. Now, sellers are trying to understand the next steps, and some have considered leaving the app permanently.

“As Venmo has introduced new experiences, we’ve also seen growing consumer demand in the market for a safe and easy solution that allows people to buy and sell other items or experiences that may fall outside of a traditional business environment. , ”a spokesman for the company told Recode.

The Venmo Acquisition Protection Program, as explained in Venmo’s updated user agreement, will require sellers to use a personal account to keep records of sales. If a customer does not receive what he paid for or if it is significantly different from what he ordered, Venmo may intervene and issue a refund. The new user agreement goes into effect on July 20 and gives Venmo buyers more power. But it also assigns much more responsibility to sellers and represents a departure from the long random nature associated with Venmo transactions.

For small businesses and people with side effects who have become dependent on Venmo, policy changes complicate their transactions – and potentially cost them a lot of money in new expenses. Now, sellers are trying to figure out how to adapt to the new rules. Someone could bite the bullet and accept the new expenses. But others are considering other options, such as encouraging customers not to tag transactions such as “goods or services.” Someone may leave Venmo altogether and turn to other payment apps.

Some of these sellers seem to think that Venmo’s new feature is less about comfort and more about a repression. In the past, Venmo has suspended or terminated personal accounts suspected of selling goods and services; now he seems to be looking for ways to make money from these sales. The change has frustrated sellers, some of whom have taken to it social media to lagnassi on the changes, accusing the society of trying to increase profits by pushing the rights of people with lateral agitation and small businesses.

Venmo argues that the new system is intended to allow protection for transactions between buyers and users who may only sell goods and services occasionally. In a blog post published Monday, the company said the new payment protections would mean sellers have the right to protections in cases where, for example, a buyer says they haven’t received anything they paid for, but the seller can prove that they are sent. The new Venmo system imitates the approach already in place at Paypal, which acquired Venmo in 2013.

It remains to be seen how Venmo’s new spending will affect small merchants, who have less than a month to prepare. However, changes to the platform come as several different payment apps, including CashApp, Zelle and Shopify, continue to compete for transactions. The new features are also a reminder that companies can attract more users with an easy-to-use platform, just by changing the online rules.

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