Is Venmo Safe?

Venmo is a financial services app that allows users to transfer money to and from other Venmo users. It works by linking your Venmo account to a bank account. Venmo then pulls money from that account when you transfer payments to others, or deposits money into this account when you receive money from another Venmo user.

So is Venmo safe? All apps and financial accounts are subject to potential security breaches. Venmo’s security and safety has come into question frequently. There was a lawsuit in 2016 over poor privacy and Venmo’s security practices. Later the FTC found that Venmo was in violation of the Gramm-Leach-Bliley Act that requires financial institutions to meet certain thresholds for safety and security of consumer data. As part of a settlement, Venmo is audited by a third-party company every two years. Theoretically, these audits mean that Venmo is safeguarding user data better.

Venmo has several layers of security. The first layer when using the app is implemented via your mobile device. To access your Venmo app, your phone must be unlocked. Venmo also offers the option to lock the Venmo app with a separate PIN. Data transmitted across the internet to process your transactions is encrypted. Finally, Venmo allows you to log out of your mobile app via the website even if you do not have possession of your phone, which protects your account if your phone is lost or stolen.

The biggest issue with Venmo security, unfortunately, comes from scams and tricks that fraudsters use to gain access to your account. Tricking users into giving away usernames and passwords allows thieves to essentially drain your account. Transfers made via Venmo are not reversible when the money is withdrawn from the receiving account. In addition, money inside of a Venmo account is not FDIC insured or regulated as a bank account, making using Venmo with strangers a bit more risky.

There are ways to make Venmo safer. First, do not keep large balances in your Venmo account. Transfer excess funds to your bank account right away. This makes it slower and more difficult for thieves to access your funds. For even more security, link your Venmo account to a separate bank account that you use only for Venmo and other online payments. Many banks and credit unions will allow you to create a sub-account online and transfer money instantly and for free. By linking a sub-account, you limit the amount of money that Venmo can access. Transfer money out of the sub-account immediately and only add money back when you anticipate needing to use Venmo.

Only use Venmo to transfer money to trusted friends and contacts. Turn on the PIN feature and do not stay logged into Venmo. That way, even if someone gets hold of your phone, they won’t be able to access your account. 

Finally, never give anyone your password or login information for any reason. Venmo doesn’t need your password and won’t ask for it. Turn on push notifications to alert you whenever money moves into or out of your account.

Is Venmo safe? It is  as safe as a financial software service can be. Use it the way it is intended, avoid scammers or fast talkers wanting your Venmo information, and monitor your account.

If you’d like more information regarding Venmo or other mobile payment apps, feel free to contact us at Key Credit Repair.