Home > Personal Finance > Is Venmo a Safer Online Payment Options Than Competitors?

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Total Venmo payments rose from $6.8 billion in the first quarter of 2017 to $31 billion in the first quarter of 2020. That’s more than a 350% increase for the rising P2P payment app. P2P stands for person-to-person, and payment apps like Venmo specialize in this niche. With Venmo, you can easily pay people back for yesterday’s coffee, split bills in restaurants or front someone the cost of an Uber ride home. But is Venmo safe? And is it the best option for you?

Venmo Basics

Venmo is an app owned by PayPal. Why does PayPal, which has a user base of more than 270 million people, need another payment app? It’s pretty simple—to compete in the P2P space.

Yes, you can send money to friends on PayPal. But the provider also offers a lot of other services, including merchant accounts, business loans, and invoicing. Consumers who simply want to split the grocery bill don’t always want to wade through the bells and whistles associated with PayPal, which is why they turn to P2P payment options.

Venmo is made for consumer-to-consumer payments, which means you can’t buy or sell things using Venmo in an official payment capacity in some cases. You can pay for goods and services with a Venmo debit card or in certain mobile apps.

Venmo Versus the Other Apps

Venmo isn’t the first or only P2P payment app. Other options include, but aren’t limited to, Zelle and Cash App. Check out the table below to understand how these apps stack up to each other.

Venmo Zelle Cash App
Bank account required? No Yes No
Who can you pay via the app? Friends or other trusted contacts Friends or other trusted recipients Anyone, including professionals or charities
Can you get a debit card to make payments at the register and online? Yes No Yes
Can you hold a balance in the app? Yes No, money transfers to and from your bank account automatically Yes
Cost? Free unless you use a credit card, which comes with 3% fees. 1% fee for instant transfer of amounts to a bank account. None. Unless charged by your bank. 3% for credit card payments and 1.5% for instant transfer of Cash App amounts to bank accounts
Limits $299.99 weekly if your account is unconfirmed. $4,999.99 weekly if confirmed. Depends on the bank or credit union. If the bank or credit union doesn’t offer the app direction, you can only send $500 weekly. Sending: up to $250 in 7 days if you’re unverified, up to $7,500 weekly when verified. Receiving: Up to $1,000 in 30 days if unverified, unlimited if verified

Sources: https://venmo.com/about/product/,https://www.zellepay.com/, https://cash.app/

Is Venmo Safe to Send Money On?

As far as payment activities go, Venmo is considered safe since it uses bank-level encryption to protect your financial information. Plus you can choose to add layers of authentication including a required PIN number. Venmo also notes that its app is specifically designed for payments made between people who already know and trust each other. Using Venmo in this way can help reduce any security issues.

That being said, it’s always important to ensure you know as much about the apps you use as possible—especially when they’re linked to your money. Venmo is different than your typical financial app because it’s designed to be social. You can find and share payments with friends via the app, but if you’re not careful, anyone can see who you’re paying, how much and why.

One researcher studied millions of public money transfers over Venmo and was able to gain a lot of personal information about people. Why are so many people sharing their payment information with everyone else? Because Venmo’s default settings are public. If you sign up to use Venmo, make sure you investigate the privacy settings. You can set your payments to private so that only you and the recipient are able to see the information.

You can also set up extra security. Venmo lets you choose to enter a PIN number whenever you take action within the app. That helps guard against your money or account being stolen if your phone is misplaced. And while we’re on that topic, you might want to consider protecting your phone with a fingerprint scan, face scan or PIN.

Finally, consider how you pay with Venmo. You can choose to set Venmo up to draw from a bank account directly, from a bank account via a debit card or from a credit card account. A credit card may be the most secure option because credit card companies typically offer more protections against fraud. While it does cost an extra 3% to fund your Venmo account this way, it might be worth it for the peace of mind.

Venmo Can Be Useful and Convenient—But Be Careful

Is Venmo worth getting? Well, think about it this way—are you constantly going out with friends and trying to figure out how to pay your part of the bill? Then sure! Venmo is great for splitting the bill and even for less fun things, like paying your roommate for your share of utilities.

But you can never be too careful. If you’re worried about privacy, put your Venmo on private. Don’t be afraid to set up a PIN number. Venmo is super convenient, but make sure to use it wisely and carefully.

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