Sending money to your friends is now as simple as tapping a button on your phone. It’s so easy, in fact, that mobile payment services such as Venmo have turned the experience into social media.
When you pay your buddy for the hot dog and Pepsi he bought for you at the Nashville Predators game, your transaction is publicly posted in the Venmo app for all of your friends to see and react to. You’re even encouraged to use emojis to explain the $15 payment.
It’s effortless. It’s fun. And it’s dangerous.
Venmo: Think before you link
According to WRCB-TV, 40 million people are actively using Venmo, and they’ve transferred more than $50 billion in 2019 alone.
Alec Logan of MoneyDoneRight.com told the Chattanooga TV station that users should refuse to link their bank accounts or debit cards to the app. Paying the credit card fee might be a minor annoyance, but it will allow for more protections on the back end.
If you feel as if you must link a bank account, consider opening a new account—at a different institution from your primary account—for the express purpose of connecting to Venmo. Keep a small amount of money in there ($50 to $100, advised Logan) so that if it is compromised, the loss won’t be as devastating.
Venmo, Apple Cash scams tough to undo
As one victim detailed in USA Today, there’s little to no recourse when a peer-to-peer payment scammer takes advantage of you.
He used Apple Cash—a service very similar to Venmo—to send a $75 payment for an Ariana Grande concert ticket. Five minutes after making the payment, the victim realized a ticket would not be coming; the con artist had deleted their Facebook account and therefore any method of contact.
Apple Cash provided zero options to claim fraud and recoup the money. Venmo has similar limitations.
Gartner expert Avivah Litan told USA Today that users should never send money to people they don’t personally know. Especially if they’re unable to verify the recipient’s identity.
“These payment systems should carry a big red flag that says you’re not protected,” Litan said.
Peer-to-peer payment apps: Best practices
There will be more and more options available to send your money to friends. Facebook is launching its own service, for example. The most important thing you can do is to stay on top of the risks.
Marjorie Stephens of the Better Business Bureau recently explained different ways scammers take your money on these peer-to-peer payment apps, and also outlines the tips from the BBB. In her South Bend Tribune column, she provided the following tips:
- Only use Venmo—and similar apps—with your friends. The intended purpose of the app is to complete transactions with people you know.
- Use a password on your phone. In the event your phone is stolen, this should prevent thieves from accessing your payment apps.
- Enable additional security settings where possible. This might include multi-factor authentication or using a PIN.
We at The Security Awareness Company would like to add: Your default Venmo settings mean that any of your “friends” can view your transactions. Conceivably, they could know that you attended dinner at a specific restaurant in specific company and paid a specific amount of money for your food. For these “friends,” the more information they can gather about you, the better for them and, potentially, the worse for you.
So, switch your settings to “private” to give yourself at least one layer of protection.
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