Is Venmo right for your club?

Even if you could get approved as a business, think again.

You’re probably here because some Board Member (possibly you) had the bright idea to collect dues through Venmo because somehow it’s magically FREEEEEE!!!  Meaning there aren’t any fees associated to sending or receiving money (like there is with Paypal). It’s a utopia of transactions. So why aren’t businesses using it for EVERYTHING!?

Paypal owns Venmo (twist!)

And they didn’t buy Venmo to cannibalize their core business. Keep in mind, Paypal already had a free way for friends and family to send money to each other for free when they bought Venmo, but their way wasn’t as “social”.

And that’s what Venmo is: a Social Commerce Platform.  Their words not mine.

Venmo is a vapor-trail of money

My actual transaction data for what was paid for. Note one row was just empty. Imagine sending this to the IRS.

I’ve heard from neighbors that pay their after-school help through Venmo that couldn’t prove it at the end of the year for their Tax returns. I found this hard to believe, so I went back through my own Venmo transaction history.

Logging in through their website I was only able to get 90 days of my transaction history to export out to CSV. Aside from not having a full year’s worth of data (or multiple years in case of an IRS audit), Venmo leaves it up to the sender to categorize what was actually paid for. So expect to see a lot of Swim Emoji icons for everything from Family memberships to concessions when members pay. If you are reading this as your club’s accountant, you should be feeling queasy right now. 

Venmo does have fees

Thought Venmo was totally free. They do have fees. So for example, if a Member funds their transaction with a credit card, they get stuck paying 3%. That’ll likely never come up for small purchase items, but it will for the larger membership payments. So what will likely happen is members will try to create their own installment plans based on what is currently in their Venmo account.

“Yo,  I only paid $90 because thats what I had in my account, I’ll send more when this guy on NextDoor buys my kid’s old bike.”

This will happen because people treat Venmo like Venmo. It’s fun-bucks for most people. But by introducing play-money into your otherwise serious revenue stream, you’ve now given members a reason to treat the club like their bro, “Dude, just let me swim this weekend and I’ll get ya those dues later”.

Venmo is literally telling you to get off their website

If you’ve ever used Venmo, you already know its deeply tied to your mobile phone. For fun, try deleting the app and reinstalling it. Unlike most apps you won’t be asked to log back in. Venmo is that sticky. It’s like you never deleted it.

They really don’t want users relying on their website for much of anything. At the time of this article, the picture below was front and center when I logged in…

This is another bad sign for anyone that wants to treat Venmo seriously as a revenue-collecting tool. Imagine on-boarding a new Treasurer and explaining to them their phone now gets to be the lucky device with the club’s Venmo account installed. Just hope they weren’t planning on using their own Venmo account for a few years.

This is how clubs lose their non-profit status

Digging through a box of old Board Member documents recently, I discovered my home club had temporarily lost their non-profit status due to a rather minor accounting mistake. So if you’re sweating 2.2% in Paypal fees, imagine having to pay taxes as a for-profit business.

If the IRS lines up 5 clubs in a row, and has their choice of one to audit, and 4 of them have bullet-proof accounting records via a single source of money received, and 1 of them is taking in dues all over the place: Venmo, Paypal, checks, cash, etc, guess who gets the audit.

The first thing the IRS will want to check is money going back out the same way it came in. Refunds via Paypal are pretty straight forward. The transaction can simply be refunded, and there’s a clear paper trail linking the original order and the refund.

Imagine what a refund would look like in Venmo. It would look like the club is paying money back out to members.

Mixing in a social commerce app into the revenue stream of any business pulling in hundreds of thousands is going to be a red flag.

It’s so easy to do things right…

The 2.9% in processing fees are just part of doing business. And Paypal will actually knock those down to 2.2% if you simply get in touch with them and prove you are indeed a non-profit (you don’t need to be a charitable non-profit either).

If you become a PoolDues client, your shopping cart will send all orders through to Paypal and log them every step of the way. So when the order completes, Paypal sends a message back to the website to switch the transaction from Pending to Completed and logs that payment FOREVER in the system. Potentially storing transactions for decades! Pending orders are also noted, so for example, a member might say “But I thought I paid,” and you could search back to see indeed they did put something in the shopping cart, but never completed the transaction. Members get distracted during the payment and trust me this will happen. But it’s far easier to track down than someone claiming they mailed a check that never arrived.

Paypal can simultaneously send data to QuickBooks Online. So in terms of rock-solid accounting, you’ll have 3 sets of the same exportable transaction history. The PoolDues backend, Paypal, and QuickBooks Online. All of which will be in sync.



Some of our clients that are generating more revenue AND making volunteer-life easier!


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