How to Protect Yourself on Venmo in 5 Minutes

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With Venmo being one of the most popular ways to send money, it makes sense to wonder what’s keeping your personal data and digital wallet safe. Venmo has made strides to improve its security in the past two years, but here’s the short answer to how safe Venmo is—protecting yourself comes almost entirely down to you.

How to Keep Your Personal Info Safe on Venmo

It takes only five minutes to make your Venmo account more secure by doing three things.

1. Change the default audience

Venmo sets its default audience to public, which means anyone can see your transactions. Venmo never displays the amount you pay someone, but everything else is fair game. Strangers can see names (both yours and the recipient’s) and payment messages (e.g., “thanks for the b-day dinner”), which can make it easier for someone to impersonate you and request payments from friends or family.

How to: Go to Settings, under the Sharing category (called Privacy & Sharing on iOS) select Default Audience, and change to “Participants Only” (the default setting of Venmo is set to “Public”). If you don’t want to let go of the social aspect of Venmo, at the very least change the default audience to “Friends” so only friends can see your payment details and messages. Not only will changing the default audience setting make you less susceptible to fraudsters, but you won’t have coworkers find out you didn’t invite them out for drinks after work.

2. Turn on alerts and notifications

Venmo has gotten better about notifying users of activity on their accounts, but you may need to tweak a few settings to ensure you’re never in the dark if something happens. For example, by default Venmo will alert you to account activity via email. However, if you’re the type of person who avoids checking your inbox or gets drowned in emails every day, an important Venmo account notification could get lost.

How to: You can turn on text notifications or customize alerts by going to Settings, selecting Alerts and Notifications, and then choosing Push, Text, or Email Notifications. Alerts and notifications are incredibly easy to personalize, so do what works best for you. Setting up the right alerts will help you stay on top of what’s happening on your Venmo account.  

3. Set up a PIN code

Even if you already have a PIN for your phone, you should set up a separate one for Venmo. If someone were to come across your unlocked phone, they could immediately open your Venmo app and mess around with your money. Adding a separate PIN for the Venmo app provides yet another layer of security for you to fall back on should your phone fall into the wrong hands.

How to: Go to Settings and select PIN Code under the security settings (steps may vary on iOS). Follow the instructions to set up a four-digit PIN, and you’re good to go. Now, whenever the Venmo app is opened, it will immediately ask for the PIN.

What Venmo Does to Protect You

To remain compliant with federal banking standards, Venmo uses the same type of data encryption and storage you would expect from an online bank. For many, just knowing that much may provide some comfort. However, though Venmo makes efforts to keep your data secure, it does not offer buyer or seller protection for unauthorized third parties. You may wonder why that is, but it goes back to the purpose of Venmo—it’s a service for sending money to friends and family, not strangers.  

If you want to stay safe on Venmo, simply don’t send money to people you don’t know. Venmo isn’t meant for purchasing Lady Gaga concert tickets from someone you found on Craigslist.  

In the past, Venmo didn’t offer other security features, like two-step authentication, but now two-step authentication is on every Venmo account by default (see image). If you’re unfamiliar with two-step authentication, it’s when you try to log in to an account from an unfamiliar device (computer, smartphone, etc.) and you’re required to enter a passcode sent via text. It’s an awesome security feature, and you should be using it for more than just Venmo.  

One More Thing to Know about Venmo

There is one extra step that will help you stay protected on Venmo, and that is using a credit card instead of a debit card or checking account. Yes, there is a 3% fee on transactions with a credit card, but most credit cards won’t hold you liable if you’re a victim of fraud.

Note: If you lose your phone or it gets stolen, revoke phone access by logging in to Venmo via computer and contact Venmo immediately.

Is Venmo Safe to Use?

The real answer lies with you. If you take five minutes to set up the security settings (create a PIN code, turn on alerts, etc.) and change the default audience—don’t ever set it to “Public”—you’ll make yourself a much harder target for fraud. It’s not a perfect service, but Venmo is much better about its security now, so the rest is up to you.

Image: istock

The post How to Protect Yourself on Venmo in 5 Minutes appeared first on Credit.com.

Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up

Perhaps you’ve heard of Venmo, a PayPal-owned company that caught like wildfire among millennials and is currently the most popular way for people to split the bill. The digital peer-to peer (P2P) payment service is ubiquitous to the point of being a verb — “Venmo me” — but that’s not stopping the big banks from making a play for the market.

They’re responding with Zelle, a P2P transaction platform that says it can process payments between accounts at different banks within minutes, for free. When using apps like Venmo, PayPal, and Square Cash, consumers may have to wait up to two or three days to access deposits in their bank accounts or pay a fee for instant access.

What is Zelle?

Zelle is a P2P payment service that lets you send money directly to your friends’ and family members’ bank accounts using only an email address or phone number, even if their account is with a different bank. As of this writing, Zelle is only live at nine banks: Bank of America, Capital One, Chase, Fifth/Third Bank, FirstBank, PNC, U.S. Bank, USAA, and Wells Fargo. It lists 25 additional bank as “coming soon” on its website.

Parent company Early Warning says Zelle will reach about 86 million U.S. consumers through its partners’ mobile banking applications. If your bank isn’t partnered with Zelle, you can still create an account using clearXchange, the network that powers Zelle, to send and receive money using email addresses and phone numbers (much like other P2P payment services).

Before Zelle became available through banks’ mobile apps, it was already hard at work establishing itself in the P2P payments space. Early Warning reported in April the Zelle network processed more than 170 million P2P payments in 2016 totaling $55 billion. In the same year, Venmo processed $17.6 billion in payments on its free mobile app, a year-over-year growth of more than 140%.

How Zelle works

Zelle plays up its ease of use: Because it’s integrated into mobile banking apps, customers of banks using Zelle can use a single app to schedule bill pay, make deposits, and complete fee-free P2P transactions. That means there is no extra app to download, unlike stand-alone apps like Venmo and PayPal. (Zelle does, however, plan to release an app.)

Here are some examples of how Zelle has been integrated into mobile banking:

Where to find QuickPay with Zelle. Source: JPMorgan Chase.

 

Zelle payment options in the Bank of America app. Source: Bank of America.

To reach customers whose banks aren’t part of the Zelle network, Early Warning says it partnered with MasterCard and Visa to make a Zelle app that will allow transfers to those at nonparticipating banks and just about everyone with a U.S.-based debit card. Early Warning says they plan to release the app in the coming months.

Where Zelle has an edge on competitors

When you send money to a friend using Venmo, they instantly receive that amount in their Venmo account, but then need to initiate a bank transfer to access the funds. The same goes for PayPal and Square Cash. With Popmoney, a service that sends money directly between bank accounts, there’s no need to initiate a deposit, but it takes a couple of days for the transactions to clear. With these services, it can take one to three days for a deposit to become available in your bank account.

By leveraging its network of bank partnerships, Zelle claims consumers should be able to make transactions between different institutions within minutes. However, if your recipient does not have access to Zelle through their bank or credit union, or their partnered bank does not yet support real-time payments, Zelle loses its advantage. The same is true if you decide to send the money using clearXchange. Transactions would then take between one and three days to complete, no better than the likes of PayPal or Venmo.

Though Zelle touts transaction speed as one of its greatest strengths, its competitors aren’t far behind. Square Cash offers instant access to transferred funds for a fee of 1% of the deposit amount, and in June, PayPal started rolling out instant transfers to PayPal and Venmo users with eligible Visa and MasterCard debit cards. That perk will carry a 25 cent fee per transfer, so for now, Zelle has an edge by offering fee-free speed.

There are dozens of ways you can can send money to friends, family members, or the person you picked up your coffee table from on Craigslist. They range from social media options like Snapcash or Facebook Messenger, to full-fledged mobile and web apps like the PayPal app or Google Wallet. We asked Aite Group’s Banking and Payments industry analyst Talie Baker which big players in the P2P payments space to compare to Zelle. Here’s a breakdown of how they stand up to the financial industry’s P2P processor:

Click an icon below to see how Zelle compares to other payment applications

Feature Zelle Venmo PayPal Square Cash Popmoney Google Wallet Facebook Messenger
Who you can send money to Anyone whose bank offers Zelle (86 million consumers) or anyone who is set up with ClearXchange (25 million registered users) Anyone with a Venmo account (unknown, owned by PayPal) Anyone with a PayPal account (210 million customer accounts) Anyone with a Square account (unknown) Anyone at any of 2,400 financial institutions (70 million consumers) Anyone with a Google account; no need to have a the Wallet app Anyone with a Facebook account who is 18+ years old
Time it takes deposit to become available in recipient’s bank account Minutes, unless the recipient banks with a bank that doesn’t support instant transfers or isn’t a partnered institution 1 to 3 business days after transferring from Venmo account to bank. Instant access coming soon, for a fee of $0.25 per transaction. Up to 4 business days. Instant access coming soon, for a fee of $0.25 per transaction. Up to 2 business days. Instant deposits are available for a fee of 1% of the deposit amount. Up to 2 business days 1 to 3 business days after transferring from Google Wallet to bank Up to 5 business days
Has a stand-alone app No. Zelle is integrated directly into existing bank mobile apps. Yes Yes Yes No. PopMoney is integrated into existing mobile banking apps. Yes Yes
Has a web version Yes Yes Yes Yes Yes Yes Yes
Fees None Free to send money from a bank account or debit card

3% fee to send money from a credit card

Free when you send funds via a bank account

2.9% plus 30 cents (U.S.) of the amount you send using a debit or credit card

Free to send money from a bank account or debit card.

3% fee to send money from a credit card

Free when receiving money

$0.95 to send or request funds

Free Free
Accepts credit card transactions No Yes Yes Yes No No No
Transaction limits None, but your bank may impose transfer limits Send and receive up to $2,999.99 per 7 days after identity verification; receive up to $2,000 per transaction on Venmo. Send and receive up to $10,000 per transaction Send up to $2,500 a week after identity verification; receive more than $1,000 per 30 days after identity verification Daily transaction limit for a debit card: $500

Daily transaction limit for a bank account: $2,000

30-day transaction limit for a debit card: $1000

30-day transaction limit for a bank account: $5,000

Send up to $9,999 per transaction or up to $50,000 in 5 days. If you live in Florida, you can send up to $3,000 every 24 hours. Up to $9,999 within 30 days
Supports international transfers No No Yes – Fees to more than 200 countries vary. No No No No
Lets you store funds on an in-app account No Yes Yes Yes Yes Yes No

Other things you need to know about Zelle

Transfer limits: There are no limits to the amount of money you can receive, but there may be limits on how much money you can send, depending on your bank and the type of account you’re using.

Zelle allows banks to regulate your transaction limits. For example, Chase caps transfers from personal checking accounts at $2,000 per transaction, and customers can send up to $2,000 a day and $16,000 in a calendar month. However, customers sending money from a Chase Private Client or Private Banking client account can sent up to $5,000 per day and $40,000 per calendar month. Check with your bank to see if any limits apply to you before sending large amounts of money.

No credit card transactions: You won’t be able to send money using a credit card at all, even after Zelle rolls out a mobile app, like you can for a 3% fee on Venmo.

No international transfers: As of this writing, Zelle’s system doesn’t support international payments. The service only works with U.S.-based bank accounts, so you won’t be able to send money directly to family abroad. However, if you are traveling and have access to your bank account overseas, you can receive transfers made to your U.S.-based bank account.

The bottom line

If you’re sick of waiting one to three days to access your roommate’s $400 share of the rent, Zelle may be a solution — that is, if you and your roommate both have bank accounts on the Zelle network. And even though Zelle may not have the name recognition of Venmo or PayPal, it offers something they don’t: fee-free instant transactions. A 25 cent fee for instant access to your funds or a 3% fee for using a credit card can add unnecessary costs to using your own money. But if you’re simply looking for a way to pay friends for free, Zelle is an easy-to-use option — just like many other P2P platforms out there.

The post Zelle Is Big Banks’ Response to Venmo — Here’s How it Stacks Up appeared first on MagnifyMoney.