Venmo’s new fees for goods and services may hurt small businesses

Venmo is changing the way its fees work. The new model won’t affect everyone, but if you’ve been using your personal Venmo account for your side hustle, it’s about to get more expensive.

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

Venmo says its new system is meant to protect buyers and sellers. But sellers who…

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