If you’ve yet to try it for yourself, the intriguing payment app Venmo may seem like something of a minefield. After all, isn’t it dangerous to hand over your bank details to a third party? We dug up answers to the burning questions, from “What is Venmo?” to “How does it work?” to “Is Venmo safe?”
So, what is Venmo anyway?
Far from its initial roots in 2009 as a text messaging service, Venmo offers peer-to-peer payments via the use of their mobile app or website. What that means is that you can charge people money, pay them, and split bills using the platform. Since few people, least of all Millennials, tend to carry cash these days, the ability to transfer small sums using a simple app is ideal.
Why would you want to use it?
Any minor expenditure is fair game. For example, after a night on the town, paying the babysitter can be done with just the touch of a button. (Here’s what the sitter thinks of you, by the way.) What’s more, if you’re in a bar with your girlfriends, splitting a round of drinks has never been easier. All you have to do is transfer the cash to one person and let them head to the bar while you carry on chit-chatting. The list of ways you can use Venmo is almost endless. Remember, the aim of the app is to make these payments as smooth and painless as possible.
How to use Venmo
The first step is, of course, a sign-up process. Don’t worry—it’s relatively easy. Just head to the Venmo page and create an account using either your Facebook profile or your personal email address. Once you’ve done that, you can download the app and log in in mere seconds. (Luckily, the app is available for all major smartphones on the market.) Next, link a credit card, debit card, or checking account to your Venmo account. Be aware that in doing so, you’re handing over access to the service. After this final step, you’re all ready to get started and begin transferring cash between you and your peers. The service is free if you’re using a debit card or bank account but you will be charged a 3 percent fee on transactions should you use a credit card.
Is Venmo safe?
Security is, understandably, one of the major worries that people have when it comes to financial apps. We’re learning about new technology all the time and, for many, the idea that an app can access your bank account is utterly terrifying. Luckily, there are a few regulations in place designed to protect you and your finances. As you would with any banking app, this one allows you to set up a personal pin code. Without knowing that pin, no one can access your app, no matter how hard they try. What’s more, the Venmo app uses both bank-level security and data encryption within the app. These two precautions prevent any unauthorized transactions. Should your account be compromised in any way (which, frankly, is unlikely), Venmo covers 100 percent of your lost balance. The moment you realize that there’s an issue with your account, it’s crucial that you contact the support service, since their coverage applies only if they’re alerted within two working days.
What about the competition?
While there’s no doubt that Venmo is the market leader in peer-to-peer payment, there are, of course, many other options out there. In fact, just this week, Mashable reported that a whopping 19 banks are planning to launch something called Zelle. The web page and mobile app will share many of the same traits as Venmo and will, of course, allow users to split bills with ease. It should be available for a variety of users and will connect directly to your bank account. Whether this latest service will make the likes of Venmo obsolete is yet to be seen. Meanwhile, if you’re in favor of using apps to manage your finances, check out these money-saving apps for iPhone and Android.