When it comes to the world of finance, there are a variety of applications and software that make transferring funds a breeze. Some clients like to pay by check, while others prefer to pay by credit card—Square here, Stripe there. And then there is Venmo.
Venmo has swiftly become a popular financial tool used by millions of individuals around the world. It’s the quickest and most convenient way to transfer money to loved ones. You can also enable the social component to share your activity and the messages from your friends.
Venmo makes money transfer easier and more convenient, but the real question is if it is a safe app to use or not? If you’re thinking about utilizing this money transfer service, this may be the most pressing question on your mind. Understanding Venmo’s security features and how they function is important if you want to have complete peace of mind when it comes to your finances.
Venmo operates by establishing a link between your bank account and/or credit card accounts and your Venmo profile. This is what enables you to send and receive money to and from friends, relatives, and anyone else who also has the app installed on their device. In order to handle transactions between individuals who are giving and receiving money, the Venmo platform makes use of an application programming interface.
Is Venmo Safe?
Yes, Venmo is safe. However, there are some precautions and items to be aware of before deciding to send or receive money with Venmo:
- Venmo isn’t completely foolproof. Someone could use the app to fraudulently withdraw money from your bank account if they have your PIN or login data and you haven’t set up multi-factor authentication.
- Venmo has been attacked for its security, delayed customer service responses to breaches, and failure to protect its users’ personal information. These concerns have brought attention to the app’s flaws, but they’ve also compelled the company to take action to avoid similar blunders in the future and better serve its customers.
- Venmo’s poor privacy, safety, and security practices were the subject of one major settlement in 2016, when Texas Attorney General Ken Paxton filed a complaint against the company. A $175,000 payment to the state was included in the agreement, as were changes to these procedures.
- Venmo provides a Visa card which can be run on any merchant machine without using a pin number. If you lose your card, you are vulnerable to losing your money.
In addition, Venmo and the Federal Trade Commission (FTC) reached a settlement in March 2018 over Venmo’s failure to tell customers about privacy settings. Furthermore, the FTC ruled that the corporation was in breach of the Gramm-Leach-Bliley Act’s (GLBA) Safeguards Rule, which mandates financial institutions maintain safeguards to preserve customers’ information security, confidentiality, and integrity.
For the next ten years, Venmo’s compliance efforts will be audited by a third party on a biennial basis as part of the settlement. A civil penalty of up to $41,484 per violation of these stipulations could be imposed.
Risks of Using Venmo
Your Venmo account could be hacked like any other internet account, resulting in your balance being depleted. You should be wary of frequent Venmo scams, such as someone using a stolen credit or debit card to finance a payment, or someone fraudulently rejecting a payment after you’ve transferred them money. Only follow and connect with friends and family you can trust when using Venmo. You should never use it to pay for goods or services from strangers. If you’re buying something off of Craigslist or Facebook, don’t use Venmo. Even if the merchant insists on it and appears to be reputable, don’t give in. In addition, if you’re selling something, this isn’t the best option for you. Make a strong and unique password, as any app or software provider will advise you. Even if you’re using Venmo to transfer money, you’re not exempted from this rule.
Overall, Venmo is a safe way to transfer money and receive payments.
Sources
- Fair, L. (2018). Venmo settlement addresses availability of funds, privacy practices, and GLB. Federal Trade Commission. Retrieved from https://www.ftc.gov/news-events/blogs/business-blog/2018/02/venmo-settlement-addresses-availability-funds-privacy
- MANSA, A. B. J. (2021). How Safe Is Venmo and Is It Free? Investopedia. Retrieved from https://www.investopedia.com/articles/personal-finance/032415/how-safe-venmo-and-why-it-free.asp
- Notopoulos, K. (2021). Venmo Is Ditching Its Public Feed. But It Still Needs To Do More. BuzzFeedNews. Retrieved from https://www.buzzfeednews.com/article/katienotopoulos/venmo-public-feed