The Best Way to Send Money Online in a Pandemic

Dear Rich Lifer,

A lot of us are stuck at home right now. We might also be looking to send or receive money. And yet there are all kinds of unique issues with doing so – everything from germs on physical cash to altered hours at many financial institutions.

That makes this an ideal time to talk about the most popular ways to transfer money through apps and websites.

We’ve talked a lot about Paypal in several articles already – highlighting some of the ways in which it can protect buyers, derail online sellers, and lead to unpleasant interactions with the IRS.

But all of those issues impact online transactions involving the exchange of goods and services.

Paypal was originally started as a simple Internet-based money transfer service – a way to literally “pay a pal” – though at the time the service was called Confinity. The Paypal name only came after a merger with, a company launched by a guy named Elon Musk.

Twenty years later, making money transfers through the Internet – especially through mobile apps on smartphones – is a near-daily practice for millions of people.

Paypal is still the leader in the field, with roughly 254 million users, but it isn’t alone in the space.

Indeed, while Paypal remains the primary way to send money for online business transactions, there are now two other big players in the peer-to-peer payment world…


The first one is Venmo, which has something like 59 million users, and is now also owned by Paypal.

Venmo has become the de facto way for people to send small amounts of money to each other … and unlike Paypal, it doesn’t typically charge fees for doing so.

Did someone pay for a group dinner and you need to reimburse them for your share? Rather than grabbing the cash out of a wallet, you can just “Venmo them” later.

That’s right. The practice has become so common that the brand name has morphed into a verb!

My family has used Venmo for everything from paying my daughter’s piano teacher to sending money to friends. 

Of course, Venmo has at least a few potential downsides …

For starters, both the sender and the recipient must have Venmo accounts.

It is also only good for people physically located in the United States (and with a U.S. cellphone capable of sending and receiving text messages).  

In addition, Venmo has a social aspect to it – where users can follow each other, see transactions that have happened, and even comment on the exchanges. Some people might like that. I certainly don’t.

Like Paypal, Venmo also serves as a holding account for the funds being transferred. That means you maintain an actual Venmo balance. That money is not protected by FDIC insurance. If you want the money transferred into a bank account or somewhere else, you have to take an additional action. And if you want the transfer to be instantaneous, you pay a 1% fee.

Lastly, you can’t cancel a payment once you send it via Venmo.

That brings us to another app which I recently used for the first time…


Unlike Paypal and Venmo, Zelle doesn’t actually hold the money. It simply facilitates transfers between bank accounts.

To use the service, you can either:

A.    Download the Zelle app and connect it to a Visa or Mastercard debit card linked with a U.S. bank account   

B.    Sign up for the service through your financial institution if they’re a Zelle partner

Users don’t pay fees for using Zelle, but your bank or credit union might charge you one.

You also can’t use a credit card to fund a Zelle payment. In contrast, Venmo and Paypal allow this, but assess a 3% fee.

Zelle transfers don’t take long at all, assuming both parties already have accounts.

And like Venmo, you essentially can’t cancel a Zelle payment once it’s been sent.

So which do I prefer?

Well, if we’re talking eBay, then Paypal is still pretty much the only option right now.

For small amounts of money to friends or family, I think Venmo makes a lot of sense.

For bigger transactions, especially business payments, Zelle is the best call.

If I want to send something in the actual mail – that acts like cash – I would still choose a Postal Money order.

Obviously, what makes the most sense for you will depend on a lot of unique factors.

The good news is there are now several good ways to easily send money without having to exchange physical cash or leave your house.

To a richer life,

Nilus Mattive

Nilus Mattive

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Nilus Mattive

Nilus is the editor for the daily e-letter The Rich Life Roadmap and a Paradigm Press analyst.

Nilus began his professional career at Jono Steinberg’s Individual Investor Group, where he published his original research through a regular investment column. Later, he worked for a private equity business and spent five years editing Standard and Poor’s...

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