Venmo vs. Zelle: Which One Should You Use to Pay for Your Sublet?

Introduction

When it comes to paying for sublets online, there are many payment options to consider. The question of secure and efficient payment methods is still unsolved. Venmo and Zelle are two popular options when it comes to paying for short term rentals on Facebook, Reddit and Craigslist. Understanding their nuances, benefits, and risks is critical for anyone navigating the subletting process.

Zelle vs Venmo

Zelle and Venmo, both heralded as convenient and rapid digital payment systems, offer distinct advantages tailored to different user needs.

Zelle, integrated directly with major banks, facilitates almost instantaneous transfers, a feature that eliminates the waiting time typical of traditional banking. This direct linkage instills a higher degree of trust amongst its users.

Venmo, by contrast, combines social networking with financial transactions. It offers the added benefit of a user-friendly interface and a social feed, which, though entertaining, serves as a double-edged sword by potentially exposing transactions to prying eyes. Venmo's appeal lies in its flexibility and ease of use, particularly among younger demographics.

Both Venmo and Zelle are only available in the US, so they won’t work for you if you are an international renter.

Risks: Where Zelle and Venmo Fall Short

Both platforms, despite their convenience, are not without risks.

For Zelle, once a transaction is initiated, it cannot be reversed. This policy, while designed to streamline banking, also opens the door to potential fraud. Scammers often exploit this irrevocability, luring users with false advertising and then ghosting once the payment is received.

Venmo, while offering a slight buffer with its transaction review period, also presents vulnerabilities. The social aspect, coupled with the informal nature of many transactions, can lead to misunderstandings and disputes. Moreover, Venmo's protection policies are not as robust for services and goods transactions as those of more traditional payment processors.

Platform	Pros	Cons
Zelle	Speed: Transfers are nearly instantaneous, providing quick access to funds for the landlord or sublessor. Bank Integration: Directly linked with major banks, reducing the need for additional accounts or apps. No Fees: Typically, there are no fees for transactions between banks.	Irreversibility: Once a payment is sent, it cannot be reversed, increasing the risk of fraud. Limited Protection: Minimal buyer protection compared to other payment platforms, making it risky for transactions involving goods and services.
Venmo	Social Integration: Transaction history can be shared socially, offering transparency among trusted networks. Transaction Flexibility: Allows for both personal and business transactions, providing some versatility.	Privacy Concerns: The social feed can expose transaction details, potentially compromising privacy. Fees for Instant Transfers: While standard transfers are free, instant transfers to a bank account incur fees. Limited Buyer Protection: Similar to Zelle, Venmo offers minimal protection for transactions related to goods and services.

Alternatives to Zelle and Venmo for Paying Rent

While Venmo and Zelle are by far the most popular methods of paying for sublets, other alternatives can be considered, each with its own merits and pitfalls.

PayPal stands as a solid alternative, particularly for those seeking more robust buyer protection. Its comprehensive dispute resolution process and ability to handle international transactions make it a versatile choice. However, the fees associated with certain transactions and currency conversions are noticeably higher as a result.

Cheques, once a staple in rental payments, now seem archaic in comparison to current digital alternatives. They are susceptible to fraud and can take days to clear, causing delays and uncertainty.

Cash remains the simplest, albeit riskiest, method. The immediacy of cash is offset by the complete lack of a paper trail, making it impossible to recover funds if a dispute arises.

How to Use Venmo/Zelle Safely

To protect yourself from scams and ensure a smooth transaction, you must verify, verify, verify, both the validity of the listing and the legitimacy of the lister.

1. Google Search: Perform a thorough search of the sublet address and the recipient's name to find any red flags or previous scam reports.
2. Social Media: Check the recipient's social media profiles for consistency and legitimacy. Look for a well-established online presence.
3. Direct Communication: Have a phone or video call with the recipient to discuss the details of the sublet. Scammers often avoid direct, real-time communication.
4. Official Documentation: Request official documents, such as a lease agreement, proof of ownership, or a sublet authorization letter from the landlord.
5. Utility Bills: Ask for recent utility bills to verify the recipient’s name and address.
6. Local Contacts: If you cannot visit yourself, ask a friend or relative in the area to check the property.
7. Written Contract: Ensure there is a written sublet agreement outlining all terms and conditions, signed by both parties. You can use this simple one by Atlas, or read more in our article on sublease agreements here.
8. Overlease: Request a copy of the recipient's original lease to confirm their right to sublet the property.
9. Verified Payment Platforms: Use payment platforms that offer buyer protection, such as PayPal or Atlas, which can provide recourse in case of fraud.
10. Listing Histories: Check the listing history on platforms like Craigslist, Airbnb, or Zillow to see how long the property has been listed and if there have been any previous issues.
11. Background Check Services: Use online background check services to verify the recipient’s history and any potential criminal records.
12. References: Ask for references from previous landlords or tenants who have sublet from the recipient before.

What’s Coming: Transaction Guarantees

Some services are waking up to the pain of paying for sublets online and are offering new ways to pay for sublets that don't require you to stick with listings from a particular platform.

Atlas Pay ensures your security deposit is always returned to you in full by syncing your payments with your sublet agreement, using advanced payment scheduling and smart contract technology.

Atlas also offers a free standalone sublet agreement template, allowing anyone to legally secure their payments, even when listings are found on other platforms like Facebook, Reddit, or Craigslist.

Conclusion

Choosing the right payment method for your sublet is a balancing act between convenience and security. Venmo and Zelle offer speed and ease but come with inherent risks that necessitate cautious use. Alternatives like PayPal have more comprehensive buyer protection policies, but also come with a higher price tag.

Up and coming platforms like Atlas are aiming to provide a new standard and protocols that allow users to keep their sublet transactions safe, regardless of platform. By staying informed and vigilant, you can ensure your payment process is as seamless and secure as possible, making your subletting experience smoother and more reliable.