Venmo helps us transfer cash across family and friends in a much easier way. It allows quick and easy exchange of money directly between individuals. Venmo is available for android and iPhones. Venmo can be said to be a child of the prototype earlier built which transferred cash with the use of text messages. Being a payment mechanism that handles money, surely you are wondering two things: how safe is Venmo? It’s free?
Consider the following scenario:
Let us say you sell a product for me at the rate of $100. Instead of making the transaction with my bank account, I send the funds to you through Venmo. this transaction increases the balance by $100 while reducing my Venmo balance by the same amount. In this way, the Venmo balance is essentially an escrow balance. Some see it as a virtual ledger. This ledger represents the funds that are traded in the hands, like an escrow feature, without actually executing the transactions outside of the Venmo platform.
In general, Venmo is safe to use for simple money transfers to friends or to purchase products from an authorized vendor. The company encrypts your data and keeps it stored in secure locations, so the probability of a security breach is low. However, like all finance-related services, you need to take extra precautions.
The Venmo app has some extra security measures to keep your account safe, like a PIN requirement for every transfer. If you lose your phone or suspect that someone is using it without your knowledge, you can also remotely log out of your account on the official website.
That said, Venmo itself claims that the service is meant to be used between friends, so you should never transfer money to someone you don’t know. You will not be able to get your money back from a bad actor if you voluntarily transfer funds to them. Also, be careful what you write with your transfers, as comments can be shared publicly. You can change this in settings, but the default setting is public to everyone.
Venmo has not always been as secure as it is today. In 2016, the FTC stepped in to get the company to clean up its act. Previous claims of “bank-level” security were found to be false. The notification system Venmo used for transfers also made it easy for scammers to stop users. Fortunately, these issues have been fixed today and the platform is safe for everyone.