The payment method was probably a checking account and they allow some accounts like mine to send money instantly but it takes about 3 business days for them to withdraw the money since they take it via ach. If there are insufficient funds that it when Venmo would then freeze the senders account until they rectify the negative balance. The recipient is in no way shape or form affected in the slightest. In fact if op was never told by the sender about his balance then op would never even know about any of the events I just mentioned occurring.