Some folks have said they don't like using Pay Pal, some folks haven't been able to navigate Patreon and some folks don't want to have so much of what they donate go to fees from one or the other. I'm looking at Venmo - does anyone use this? Does anyone feel this would be a way to go they would feel comfortable with?
Post by TeddyBower on Jun 12, 2019 21:28:21 GMT -5
I hear you on the PayPal thing, Neal. I was one who got caught up in that big PayPal scandal from a dozen or more years back where PayPal was maxing out people's credit or debit cards for no good reason. I have used them since that time but only as a one time deal rather than establishing an account. Like you I would prefer some way of direct pay but even If Dave set things up like that the bank will charge him a fee for every transaction. Bottom line is nothing is perfect. The institutions will take their pound of flesh.
“Under certain circumstances, profanity provides a relief denied even to prayer.” - - Mark Twain
From what I'm reading, Venmo charges no fee for person to person xfer. You can link a bank account, or presumably load the Venmo account with funds. Funds may also be transferred to a bank account with no fee. I'm not really sure where they are making their money. They do have an optional card to use, and there is a fee for ATM withdrawal, but that's all I can find.
I had a part-time job working for an online outfit for a few years and they paid me via PayPal. Whenever the balance reached a couple grand I'd transfer it to my bank account. When the job ended I left a couple thou in the PayPal account and have been using that for mad money. Especially useful for online purchases if the vendor accepts - means one less place that gets my credit card info.
Depending on the fee structure charged by Dave’s bank, one way might be for him to open a separate bank account for donations and make the relevant details available on request for those who want to use on-line banking to make a transfer. Avoids the need for card details. It does depend on whether you think your bank’s on-line system is more secure than paypal etc.! It needs to be a separate account so that , if anything goes wrong, it doesn’t risk Dave’s personal funds. But maybe he already uses a separate account for donations.
Venmo, if I read this correctly, gives free transfer of funds from you r bank account to your Venmo account. From there, it's free from Venmo to Venmo, and from Venmo to bank account. If you pay from bank account to Venmo directly, without first placing the money in your Venmo account then there is a fee. I may sign up for this just to provide another option, but I don't want to open things like this needlessly either. As it is it looks like Patreon may provide me with a tax form and I'll have to pay taxes on anything that comes through that.
Because you said most transactions are free on Venmo, I wondered about their business model - how they make their money. For example do they trawl everything you do online and sell the information like Facebook does. It appears their charges are a sufficient basis. 3% where a credit card is used or where the user has not set up a linkto their bank account. Other things I found worth noting: Only available in the US. Only private transactions get the low rates. Business transaction are subject the higher fees. (See note below about Patreon) It is a subsidiary of Paypal. Unless you pay a fee, the funds are not actually transferred instantly. They can take three days or more to clear. There seems to be some sort of social media element that allows other users to see what you have been spending where and presumably who you have received from.
In addition to the information on Venmo’s site including their Ts and Cs, I found the following article that gives a useful summary of how it works:
I am not surprised that Patreon are going to give you a tax form and expect that you will pay taxes on what you receive through them. As I mentioned off line, when I looked into sending you something by that route it would have been subject to VAT. The transaction is considered to be the sale of an ebook and not a donation, even if it is payment in advance of the story being written. (Yes those advances authors get from publishing houses are taxable!)
Although I have not looked into Venmo, some financial organizations use the time lapse between getting the money and disbursing it to the final destination as a way to make money. If enough money flows through them money can be made through an increasing of the "float" time between when the money comes in to them, and when it is disbursed to the final receiver.