Venmo for sports clubs-—whether youth leagues, amateur teams, or local recreational leagues— is far from the best solution for handling payments, donations or selling tickets. While venmo and other P2P apps are convenient for personal use, they lack the necessary features, security, and reliability needed for organizing group finances. Here’s why Venmo for sports clubs should be avoided.
What is Venmo for sports clubs?
Venmo is a mobile payment platform owned by PayPal, designed for simple personal transactions between friends. Unlike PayPal, which is widely used for business purposes, Venmo focuses on peer-to-peer payments for everyday personal use. It’s great for sending money to a friend for dinner or splitting a cab fare. However, it’s not built to handle the complexities that come with managing the finances of a sports club, such as tracking memberships, processing large amounts of money, and ensuring tax compliance.
Why Venmo for sports clubs isn’t the best choice
While Venmo is widely popular for personal use, Venmo for sports clubs falls short. Below are the major reasons why it isn’t ideal for your organization.
- Limited Reporting and Tracking Capabilities Venmo offers very limited financial reporting features. It simply lists transactions chronologically, making it difficult to distinguish between membership dues, donations, or specific event payments. In a sports club, you need detailed records to track who has paid, what they’ve paid for, and if there are any outstanding balances. Without proper reporting, it’s easy to lose track of finances and make errors.
- Lack of Tax-Exempt Reporting Sports clubs, especially nonprofit organizations, often need to handle tax-exempt payments and report those to authorities. Venmo doesn’t offer tax-exempt reporting features, making it cumbersome and time-consuming to organize the necessary information for tax filings. You’ll likely have to manually track payments and sort through each transaction to ensure that everything is categorized correctly.
- No Protection for Non-Personal Transactions Unlike payment systems designed for business transactions, Venmo doesn’t offer the same level of fraud protection for organizational use. With Venmo, there’s little recourse if a payment is disputed or if funds are sent to the wrong person. Since Venmo is a personal app, it lacks the buyer/seller protections needed for sports clubs that need to ensure funds are used appropriately.
- No Ability to Collect Member Information A major challenge for sports clubs is tracking information about their members, such as names, contact details, or even age and skill levels. Venmo doesn’t provide a solution for this; it simply processes payments with no requirement for the payer to provide any additional information. For sports clubs that need to track these details, especially when managing rosters or offering tailored services to players, Venmo falls short.
- Risk of Fraud and Misuse Venmo accounts can be easily created with little verification, meaning it’s possible for fraudsters to set up fake accounts that resemble legitimate sports clubs. This opens the door for potential scams, where members could accidentally send money to the wrong account. Additionally, if the funds are misused or stolen, Venmo may not reimburse the club, leaving them with no way to recover lost money.
- Tax Implications As of 2024, the IRS requires users of P2P payment platforms like Venmo to report payments for goods and services that exceed $600 annually. This threshold is quite low, meaning if your sports club collects payments from several members, you could easily hit that limit. Using Venmo could trigger tax reporting requirements and potentially lead to tax complications, particularly if you aren’t prepared to deal with the reporting or associated fees.
A Better Solution: Crowded Payment Collection for Sports Clubs
Instead of relying on Venmo for sports clubs, look for a more robust, secure, and dedicated solution for payment collection. A platform like Crowded provides all the necessary tools to manage payments seamlessly, without the limitations and risks associated with Venmo.
With Crowded, you can easily collect payments, track membership dues, register players, and manage donations—all while ensuring the safety of your funds. Crowded offers flexible payment options (credit, debit, ACH, check, and cash), detailed financial tracking, and customizable collection links to meet the unique needs of your club.
Why Crowded Is the Best Payment Solution for Sports Clubs
- Transparent and Easy Reporting: Crowded provides clear, organized records of every transaction, making it easy for sports clubs to balance their books and generate the necessary reports for tax season.
- Built for Sports Clubs: Unlike Venmo, Crowded is designed specifically for sports clubs. It allows you to collect detailed information about your members and donors, which is vital for building teams, organizing events, and staying in touch with supporters.
- Fraud Protection and Security: Crowded offers secure payment processing and fraud protection features, ensuring your funds are safe and properly handled. Your players can trust that their financial information is protected.
- Low Fees: Crowded’s fees are some of the lowest in the market, making it a cost-effective solution for sports clubs that want to maximize the funds going toward player development, tournaments, and club activities.
- Compliance: With Crowded, you can easily manage tax-exempt donations and maintain accurate records that comply with IRS requirements. No more worrying about tax implications or manually sorting through payments.
Conclusion
While Venmo may be fine for personal transactions, it’s not the right choice for sports clubs that need secure, organized, and reliable payment collection. Venmo’s lack of robust reporting, security risks, and the challenges it presents for tax compliance make it unsuitable for managing a sports organization’s finances.
Instead, consider using Crowded for your payment collection needs. It provides the tools your sports club needs to collect payments efficiently, track member information, and stay compliant with tax regulations, all while minimizing the risks associated with P2P apps. By making the switch to a dedicated platform, your sports club will have peace of mind knowing your finances are handled securely and transparently.
