Venmo announced today the introduction of a new service called “Cash a Check” directly within the Venmo mobile application. This functionality, currently being released to a limited number of users, allows for the deposit of printed, payroll, and U.S. government checks, including recent stimulus payments, according to the company. While this feature will generally incur fees, Venmo is temporarily removing those charges for stimulus funds.

To utilize Cash a Check, Venmo customers must have either Direct Deposit or a Venmo Debit Card activated on their account, have location services enabled, and possess a verified email address.

Users with access to the feature can deposit checks by photographing the endorsed document and submitting it through the Venmo app for review, similar to the process used in many mobile banking applications. Check verification typically occurs within seconds, although certain situations may require several minutes, or even up to an hour, to reach a decision.

Upon approval, the funds will be instantly credited to the customer’s Venmo account.

Venmo is currently forgoing fees on stimulus checks being distributed now and in the coming weeks. However, a 1% fee will eventually be applied to government or payroll checks with a pre-printed signature, with a minimum charge of $5.00. Checks with hand-written signatures, including those for payroll or government payments, will be subject to a 5% check-cashing fee, also with a $5.00 minimum, as outlined in PayPal’s terms of service.

The Cash a Check service is initially facilitated through partnerships with First Century Bank, N.A. and Ingo Money, Inc. Ingo Money already provides a comparable service to Venmo’s parent company, PayPal, enabling check deposits within the PayPal app. 

“We are continually seeking innovative methods to simplify how our users access and manage their finances, particularly given the ongoing financial challenges presented by the global pandemic,” stated Darrell Esch, Venmo SVP and GM, in a release regarding the new service.

“Recognizing that health and safety are paramount for many, providing a secure way to access stimulus payments is crucial, especially for those receiving paper checks who would otherwise need to visit a physical check-cashing location,” he continued. “With the introduction of Venmo Cash a Check, we are empowering our customers to access their funds quickly and safely from home, and we are eliminating fees for government-issued checks to ensure they can readily use their stimulus funds for essential needs,” he added.

This expansion into check cashing does not position Venmo as a substitute for traditional online banking. Rather, it primarily allows Venmo to capitalize on the increased availability of stimulus payments being distributed to its U.S. user base.

Fintech companies are actively working to demonstrate their value to customers by offering expedited access to stimulus payments. Newer banking platforms like Current and Chime, for instance, began distributing payments to their customers before many established banking institutions.

Furthermore, these stimulus funds have the potential to improve Venmo’s financial performance beyond just the fees collected. As Venmo users receive their stimulus payments or payroll within the app, they may then utilize those funds for transactions with online retailers or through their Venmo debit card, generating revenue for Venmo through transaction fees.

Venmo reports that the feature is currently being deployed to mobile app users on both iOS and Android platforms. The company advises users to download the latest version of the app and update their mobile device’s operating system for optimal performance.