Why you shouldn't be using Cash Transfer Apps for business transactions.
Cash transfer apps (such as Venmo, Apple Pay, and Google Pay) were designed to be used for personal payment transfers between friends and family, not for business use.
There are a few reasons you should try your best to not use a cash transfer app for business purposes:
- These apps don't have statements you can send us, so you will have to let us know of each and every business transaction (income and expense) that happened within these apps. When you transfer a balance to or from your bank account, we can’t categorize that transfer directly to an income or expense account. That transfer is just a balance of funds and usually combines multiple transactions.
- If you use these apps for a combination of personal and business transactions, you are commingling, which is not good and can jeopardize your corporate structure if you have one.
- The transaction description in these apps is usually not enough to tell what the transactions was for. So unless you use clear transaction descriptions, and require whoever is sending you money to do the same, you may have a hard time categorizing these transactions.
- The Venmo website itself explains that Venmo may actually reverse the payment after review if “you accept a Venmo payment from someone for a good or service.” It states explicitly that you cannot use Venmo to “receive business, commercial or merchant transactions, meaning you CANNOT use Venmo to accept payment from (or send payment to) another user for a good or service.”
We recommend using a cash transfer app designed for businesses, such as Paypal. Even though the functionality is not as nice, and there may be fees included, it’s a better choice for your business because it provides statements we can use to categorize your business transactions without you needing to list them. If you do continue to use personal cash transfer apps, remember to list any business transaction, whether a receipt or payment, in the Add Transactions sheet that we provide you with.