Payment processing tools make it quick and easy to send money from peer-to-peer or person-to-business. With the click of a button or the tap of a finger, you can send money to someone else. Or, you can receive money from friends, family, or clients. As the number of options grows, it’s hard to know what payment system is the best one to use. Are they all the same? 

PayPal, Venmo, and Zelle are three of the most popular payment systems available. In this article, I’ll explain how each works, the pros, and the cons. And most importantly, which of these systems is right for your business (or personal use)?


paypalPayPal – one of the most popular payment tools today – was launched in 1999. eBay purchased PayPal in 2002 and it quickly gained wide success in the online auction marketplace. In 2014, PayPal spun off as a wholly independent company.

Currently, PayPal is available in more than 200 countries and supports 25 different currencies. It’s used to send money from person to person or to process business payments. 

How PayPal Works

As soon as you set up your PayPal account, you can send and receive payments online. When you receive money, your PayPal account will hold the funds there, until you request a transfer to your bank account. There are two options when making PayPal payments. You can use the balance in your PayPal account. Or, you can automatically transfer the amount needed from your connected bank account.

Using PayPal in Your Business

PayPal offers Personal and Business accounts. Sign up for a Business account if you are collecting payments online for your business. It’s free to open a Business account and free to send money. There are transaction fees associated with collecting payments that vary by region and country. 

Pros of PayPal:

Cons of PayPal:

  • 1% transaction fee for instant transfer to your bank account
  • They can freeze your funds at any time if they think you have done something wrong
  • Fees associated with chargebacks are high
  • It’s not easy to get a support person on the phone. They want you to use the forums and help guides and tutorials they have on their website to solve your problem


venmoVenmo is a mobile payment service that was launched in 2009. It’s mainly designed for peer-to-peer payments. In general, it’s more popular among millennials who use it to split bills and send money to friends. As of August 2021, Venmo is available for use in the United States between individuals who have US phone numbers. 

How Venmo Works

While PayPal can be used on a desktop or laptop, Venmo is only available for use via its mobile app. You can access your account information via the website, but there is no support for sending and receiving money via 

Once you open up a free Venmo account, you’ll get a unique username, which you’ll use to send/receive money. You’ll need to connect your Venmo account to your bank account(s) and/or your credit card accounts. 

When you pay, you can choose to use the money in your connected bank account, credit/debit card, or the balance in your Venmo account. Like PayPal, the money you receive via Venmo will sit in your Venmo account until you request a transfer to your bank account.

Using Venmo in Your Business

In general, Venmo CANNOT be used to buy or sell merchandise, goods, or services. However, they’re working on expanding their services to meet new customer needs. Currently, if you want to accept payments for your business, you need to either apply for a business profile or  identify a payment as being for a product or service. In either case, a fee will apply.

Pros of  Venmo:

  • If you’re doing personal business, there are no fees to send or receive money from a linked bank account, debit card, or Venmo balance
  • No monthly or annual fees to use. (Some fees apply for premium features and services).
  • The Venmo app is easy to use and has the feel of a social media
  • You can add messages with emojis as you send/receive money. These messages and activities can be made open to other Venmo users if you so choose.

Cons of  Venmo:

  • Not a good option for business transactions
  • There’s a 3% transaction fee to send money via credit card
  • Like PayPal, Venmo charges a fee for ‘instant’ cash out bank transfers
  • No buyer/seller protection so you must have a high comfort level with the person you are transacting with


zelleYou may not have heard of Zelle yet. It’s a newer mobile payment processing system that was launched in 2017. Zelle is unique in that it’s owned by seven major U.S. banks – Bank of America, BB&T, Capital One, JPMorgan Chase, PNC Bank, US Bank, and Wells Fargo. As a result, Zelle is top-notch in security and credibility. 

It’s mainly designed for peer-to-peer payments, as opposed to business transactions. Users can send money to friends/family who are also Zelle users via their bank account or the Zelle app.

How Zelle Works

There are a couple of major differences between Zelle and PayPal or Venmo. First, since Zelle is already a part of many banking apps, you do not need to create a separate Zelle account or download a separate Zelle app. You can send money via Zelle through your bank app. If your bank does not offer Zelle, download the Zelle app and sign up.

From the app, just specify the recipient of the payment (by either their email address or U.S. mobile phone number) and the amount to send. The money will go directly into their bank account almost instantly. This is the second major difference – the money isn’t held in a Zelle account, like with PayPal and Venmo. 

If the recipient isn’t enrolled in Zelle, they will receive a message with instructions on how to receive the money. 

Using Zelle in Your Business

For business transactions, check with your business banking institution about whether they offer Zelle and any associated fees. 

Pros of Zelle:

  • Can be used in over 1,000 banking systems. View the list of partner banks/credit unions at
  • There’s no fee to send and receive money between friends and family via Zelle
  • Zelle uses top-notch security to protect the transaction and funds are available immediately if both banks have Zelle

Cons of Zelle:


PayPal, Venmo, and Zelle are all reputable, fast, and affordable payment processing options. While similar in many ways, there are distinct differences between them. Depending on your purpose and priorities, there are pros and cons to each.

At this point, PayPal is the best choice if you’re selling products or services from your website. However, these service providers are constantly changing their features, rules, and fees. It’s very likely that Venmo and Zelle will become more business-friendly in the near future. When you choose a payment processing system, be sure to do your due diligence and select what works the best for you and your business.

I’d love to hear about your experience with online payment processing systems! Do you have another one that you like to use on a regular basis?

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