Cash may still be king but there is a growing trend to digitize our wallets. With Venmo, you can skip the ATM line and use their smartphone app to pay for your share of the pizza. Just find your friends on the app and they can have money instantly transferred to their account. Venmo is convenient, but there are some privacy concerns. For an app that functions like a bank, it is too easy to find someone’s account and view their recent transactions. It’s important to get informed and learn safe and secure ways to use your Venmo.
What is Venmo?
Venmo, owned by PayPal, is a mobile payment app designed for anyone that need to transfer money to another person. In addition to this primary function, over 2 million merchants now also accept Venmo as a method of payment.
Venmo links to your bank account and you can top up or withdraw funds from your Venmo account in an instant. You can either send funds directly from your bank account or top up your Venmo account first, and then use your Venmo balance to send money. Additionally, you can request money from a friend on the app if they owe you for concert tickets or a dinner tab or anything, really.
One of the draws to using Venmo is that you can attach messages or emojis to your payments to make sending or asking for money a little more lighthearted and exciting. Venmo is a social platform and users can “like” or comment on transactions.
How Much Does It Cost?
For most users, Venmo is completely free. There are no transaction fees to send money to a friend or to use Venmo as a method of payment to a merchant. However, Venmo does have a few features where there is a service fee attached.
The app offers the ability to link your credit card to the app. If you opt to send money using a credit card, you will be subject to a 3 percent fee on each transaction. Sending from your bank account or Venmo balance is free.
Venmo comes with a “cash a check” feature that allows you to cash a check directly into your Venmo account. If this check comes from the government or from your payroll, there will be a 1 percent fee attached to it (minimum $5 fee). All other checks will be subject to a 5 percent fee (minimum $5 fee).
If you are a business looking to accept payment via Venmo, each transaction will cost $0.10 plus 1.9 percent of the transaction total.
When it is time to move funds from your Venmo to your bank account, you can do it for free, though it will take one to three business days. If you want or need the money instantly, you can pay a 1.5 percent transaction fee to have it deposited in minutes.
Venmo also offers the ability to buy cryptocurrency through their app, as well as a Venmo Mastercard. Clarity on the cost of these features can be found here.
Benefits and Drawbacks
There are a variety of benefits to using Venmo, but there are just as many drawbacks that you may not be aware of.
- Very convenient for transferring money between friends
- No need to remember long bank account numbers and details
- Add messages to transactions
- No wallet required
- everything done from your phone
- Cash checks directly to your Venmo account
- No or very low fees
- Anybody can view your transaction history along with messages and comments
- Transactions appear instantly
- but may take a few days to clear
- Risk of fraudulent activity
- Your account can be accessed by anyone who has your phone
What are the Security Concerns of Using Venmo?
As with any smartphone app, there are going to be some privacy concerns. This is compounded when that app involves social interactions between its users and even more so when those social interactions involve financial activity. To sum it up, there are many reasons to be wary of Venmo’s security.
Venmo users should be aware of how accessible their data is and who can see their activity on the app.
Anyone Can View Your Venmo Activity
Anyone can search your profile and have access to your history of transactions as well as the messages and comments that accompanied them if your settings are set to Public. The dollar amount of the transactions is hidden, but the users involved in the transaction are visible. Additionally, anyone can view your friends list and see who you interact with on the app.
That said, you can change your settings to Friends, which is only visible to the sender, recipient, and other Venmo friends. You can also change your settings to Private, which is only visible to the sender and recipient.
The App Automatically Links to Your Facebook and Phone Contacts
Once you download the app and create your profile, the app will automatically link to your Facebook contacts as well as the contacts in your phone. This can save you time when you need to send a friend money, but if you want to avoid having all of your contacts know who you are sending and receiving money to and from, it’s best to keep this private.
Accidentally Sending Money to the Wrong Person
Because Venmo uses a person’s name and profile to identify them instead of numbers to a bank account, it’s easier to accidentally send money to the wrong person. Have you ever messaged the wrong “John Brown” on Facebook? It might be a bit embarrassing, but no harm done. Do it on Venmo though, and whatever balance you sent is gone and unrecoverable.
How to Keep Your Venmo Account Safe and Secure
Venmo is a great, convenient way to send money to friends or family members. There are some security concerns with the app, but luckily, there are a few things you can do to make your account more secure.
Make Your Transactions Private
By default, all of your transactions on the app will be publicly available for viewing. Making your transactions private will make them only visible to you and the person you are exchanging funds with.
To do this, go to Settings > Privacy. Here you can change the default privacy setting to private or to friends only. Private will make transactions only visible to you and the person you are sending or receiving with. “Friends only” means only your friends can view your transactions. We recommend the private setting.
You will need to change the privacy settings on your past transactions as well. Click on “Past Transactions” and select “Change All to Private”. Equally, you could choose the friends only option, but once again, we’d stick with private.
Disable Venmo’s Auto-Friend Features
As we mentioned, Venmo will automatically link your Facebook and phone contacts to your profile. To disable this feature, go to Settings > Friends & Social. Here you can disable the auto-friending feature.
Use QR Codes to Ensure You Send to the Correct Recipient
To save yourself the pain of accidentally sending the wrong person money, have your intended recipient show you their Venmo QR code. Scan this code and it will take you directly to that person’s profile. Now there is no doubt that you are sending money to the correct person.
Change Your Profile Name and Email
If you really want to be anonymous on Venmo you can change your name and email address in the app. Keep in mind that using an alias will make it difficult for your real friends or family to find you, so you’re more likely to need the QR code we discussed above.
Learn More About Venmo
Venmo is a convenient way to transfer money between friends and family. Its low cost and ease of use make it an attractive app for anyone wanting to quickly pay a debt or transfer funds. The amount of financial information made public by the app is alarming, however. Giving the world access to your social contacts and online payments can give would-be scammers more than enough information to pose as one of your friends looking for payment.
Your best bet is to keep your financial activity and social media accounts separate. Follow the steps we outlined to make sure that nobody has access to your financial information.