2:56 PM
Five ways to get people to pay you back (compared)
Friends or family owe you money? Here are some cash-free ways to get paid back.
You're at dinner. Suddenly you're stuck with the check as everyone promises to pay you back later. Sure, they can hand you cash the next time you see them, but maybe you'd rather just have the money go directly to where it came from -- your bank account.
To request an electronic transfer from your indebted friends, you'll have to pick a money transfer method. There are plenty of apps available now, but they're not all the same. For instance, some take days to complete a transfer, while other promise money in your pocket within 24 hours. Some require you to set up a new account, while other options get the job done with a few clicks.
As you sort through the options, pay attention to the delivery time, as well as any transfer limits. If you plan to use a money transfer app to pay the rent or get reimbursed for a vacation you spent thousands on, make sure there's plenty of wiggle room for the total transfer amount.
And finally, consider the person on the other end. If the person you're requesting money from already uses one of these services, it's worth finding out.
1. Direct bank transfer
How it works: If the person who owes you money uses the same bank, this is by far the fastest transfer method, since the funds are transferred directly to your account and are usually available within 24 hours. Many banks, including Wells Fargo and Bank of America, have simple transfer tools available within the same portal you use for online banking.
There is also a way to transfer money to people outside of your bank's network, but it often takes longer and requires a little more wrangling. The sender will need your account number and routing number, plus (depending on your bank) there could be a fee involved. It's like paying with a check, but online. In this case, it's probably better to use one of the next four options on this list.
Delivery speed: 24 hours to customers of the same bank; 2 to 4 days to people using different banks
The fees: Free.
Transfer limit: Varies based on bank.
The app: Most banks have accompanying apps that include transfer tools, but most lack the option to request money -- the sender needs to initiate the transaction.
The breakdown
| Delivery speed | Fees | Transfer limits | Withdrawal limits | Has app? | |
|---|---|---|---|---|---|
| Direct bank transfer | 24 hrs for same bank; 2-4 days for different banks | None | Varies | n/a (direct deposit) | Transfers included in most bank apps |
| Square Cash | 1-2 business days | None | $250/week; $2,500/week after verification | n/a (direct deposit) | Yes |
| Venmo | 1 business day | None for debit; 2.9% for credit | $300/week; $2,999/week with verification | $999/week; $19,999/week with verification | Yes |
| PayPal | 3-4 business days | None for bank acct. transfers; 2.9% + $.30 for debit and credit | Varies | $500/month; more with verification | Yes |
| Google Wallet | 3 business days | None for debit; 2.9% for credit | $10,000/transaction; $50,000/5 day period | $3,000/24 hours | Yes |
2. Square Cash
How it works: If you don't want to deal with setting up an account just to receive (or send) money, Square Cash is the best option. To request money, all you have to do is compose an email to the debtor, enter the balance in the subject field, and CC request@square.com. You can use the body of the email to include details about the request, if you like.
Once the recipient receives the email, you'll both be asked to provide banking information before the transfer is initiated. It's just too easy.
Once the recipient receives the email, you'll both be asked to provide banking information before the transfer is initiated. It's just too easy.
Delivery speed: 1 to 2 business days.
The fees: Free.
Transfer limit: $250 per week; $2,500 per week with identity verification.
The app: Square's app lets you send and request money just as easily as sending an email.
3. Venmo
How it works: Venmo isn't just a the name of an app -- it's a verb. "I'll just Venmo you," I heard my friends saying. After setting up an account and verifying your banking information, you'll be asked to add "friends" to the app, to whom you can send and receive money requests.
But before you sign up, know that Venmo has a couple quirks. First, there's a social element. When sending or requesting money, there's an option to make the transaction public (viewable by anyone on Venmo), friends-only, or private. You'll most likely use the private option, although it's pretty easy to miss this part when setting up the request.
The other thing about Venmo is that money isn't deposited directly into your bank account. Instead, it's added to your Venmo account balance, which you can use to pay friends in the future. When you're ready to put the cash in your checking account, you'll have to "cash out."
Delivery speed: 1 business day.
The fees: Free for checking accounts; 2.9 percent for credit card transfers.
Transfer limit: Transfers are limited to $300 per week; $2,999 per week with identity verification. Cash-outs are limited to $999.99 per week; $19,999 per week with identity verification.
The app: Venmo's app is easy to use and even enables a feature that allows you to accept friends' payment requests with a text message.
4. PayPal
How it works: If you have a PayPal account and the person who owes you has a PayPal account, the process is pretty simple. Just log into your account, head to the Request Money tab, and fill in the blanks.
If the debtor doesn't have a PayPal account, they'll be prompted to set one up. In this case, consider whether or not this person will want to do this. In some cases, it might be better to do a bank transfer (option 1) or use Square Cash (option 2).
Like Venmo, any money you receive will be added to your PayPal account balance -- in order to get the cash in your checking account, you'll need to "withdraw" it.
Delivery speed: 3 to 4 business days
The fees: Free for bank account and PayPal balance transfers; 2.9% plus $0.30 for debit and credit card transfers.
Transfer: Sending limits vary. Withdrawals are limited to $500 per month; more with identity and bank account verification.
The app: PayPal's app lets you send and request money, as well as conduct mobile payments with your phone. Read more about how PayPal works as a mobile wallet.
5. Google Wallet
How it works: If you have a Gmail account, requesting money is as easy as attaching a photo to an email. Just head to your inbox, compose a message to your payee, fill out the subject line and body as you please, then click the dollar symbol in the bottom toolbar of the message window.
At this point, if you don't have Google Wallet, you'll be asked to set up an account. When you're done, choose the Request option, enter the amount due, and you're set.
Delivery speed: Available instantly in your Google Wallet account; about 3 days to withdraw funds.
The fees: Free.
Transfer limits: $10,000 per transaction; $50,000 per five-day period.
The app: Like PayPal, Google Wallet's app can be used to send and request money, but it has other mobile wallet functionalities.
