Hacker News Reader

Comment by samstave | Hacker News Reader

Don't know if you can answer this: Why can I venmo people money instantly and paypal holds my money for days or weeks at a time?

View on HN

You can not venmo money instantly. The UI makes it seem that way, but it takes a few days for payment to process and as such, Venmo has become a target for scams: http://time.com/money/4036511/venmo-more-check-than-cash/

So do not use Venmo for commercial transactions (buying things of Craiglist for example) and do not assume the money transfers immediately.

Also shame on Venmo for misleading their users; they should do a better job of explaining how the transfer actually works.

I only use it to transfer money between myself and friends. The most time I've ever had to wait to get money from venmo to bank is 24 hours.

the longest I've had to wait from Paypal is 24 DAYS

This is a bit misleading - PayPal's 21-day hold only applies if you received the funds as payment for goods and services. Even in that case, the funds can be expedited to release in 3-5 days once the buyer marks the item as received. It's more for buyer protection than anything.

If you're in the US and receive money via a "Friends and Family" transfer, it's just as 'instant' as Venmo.

Holding onto funds is how you mitigate risk as a bank or money transmitter.

Do you think they're running loads of security tests all the while or something? I'd imagine a majority (if not all) of the checks are done up front- especially given it's 2015.

Pretty sure they get a nice bump on their balance sheet for cash "in-transit" - and keeping the timeframe to 3-5 business days only magnifies that effect.

It's not about balance sheets, it's about having time to cope with any unexpected problems with the transaction, like fraud.

It's frustrating, and ideally not necessary, but it's essentially a safety net for the middle party.

Reply on news.ycombinator.com