The other day, someone asked an interesting question. Specifically, they wanted to know if it’s “safe” to use Venmo.
As with anything online, the answer is, “It depends.”
According to Yahoo!Finance, “Overall, Venmo is generally a safe payment platform but it’s crucial that you make sure you’re always sending money to the correct person/profile and that you’re transferring money you receive on Venmo to your bank account instead of storing your money with Venmo.”
We’ll get to those last two points in a moment but first a consideration of the overall safety of Venmo or any online payment platform. Basically using Venmo is the same as driving a car, mowing the lawn or going swimming, to name three. They’re all generally safe but it’s up to the individual to pay attention, to take reasonable precautions and to be aware of well-known possible dangers.
As security.org says, “You should always assume a defensive stance when using Venmo. You should always use common sense.” (Which is true for everything you do online.)
Regarding being sure you are sending money to the right person, the most important thing is to just decide to not use Venmo (or any payment app) in a rush or when you’re distracted. It can wait – 10 minutes, an hour, until tomorrow.
Take advantage of every protective and privacy feature. For example, Venmo asks you to confirm the last 4 digits of a recipient’s phone number if you haven’t sent them money before. Yes, it can feel like a hassle but don’t skip this step. Let Venmo’s request give you the chance to make sure you’re sending to the right person.
Scammers are always fishing where there’s money and they know two things about Venmo – 1) There’s money there and 2) People often Venmo quickly and on the run, which means opportunities for scammers.
One popular Venmo scam happens this way – an unexpected money payment shows up in your Venmo account followed by a message saying the sender “made a mistake” and would you please Venmo the money back?
That’s an “unexpected situation” and “unexpected situations” are usually the first red flag of a scam. No matter how honest and helpful you want to be, slow that one way down. Contact Venmo directly about a possible fraud attempt. (Unlike many tech companies, Venmo actually has a trusted phone number to call on their web site. Currently that number is 855-812-4430. Never rely on a quick Google search for a contact phone number – always go to a company’s own web site.)
The “by mistake” sender might be upset that you haven’t refunded “their” money yet. Let them be. You don’t want to refund them only to discover a few days later that the money they Venmoed you was on a stolen credit card. Then your money is gone. Venmo will most likely not be able to get it back for you. Because – as Yahoo!Finance says – “Venmo offers little recourse.”
The other important thing to remember with Venmo is that it’s your money.
Venmo can get to be sort of like gift cards or casino chips – it’s easy to start thinking of Venmo money as “not quite real.” Also according to security.org, “Venmo is not a safe place to store large amounts of money. Your money is safer in your FDIC-insured bank account.”
Best practice is to get in the habit of not leaving money in Venmo or any payment app. Transfer it back to your bank account. Be as careful with your Venmo balance as you would be with cash or your credit cards.
From the “Smart About Money” Canton Citizen column published on October 3, 2024.
Nick Maffeo is the President & CEO of Canton Co-operative Bank – right next to the Post Office – in Canton.
Have a question? Email to info@cantoncoopbank.com.