In the fast-paced digital world, convenience is king, and Venmo has emerged as a reigning monarch in the realm of mobile payments. Its user-friendly interface and social networking features have made it a go-to for splitting bills, sending quick payments, and managing small transactions.
While Venmo might seem appealing and convenient for your banking needs, there are some hidden truths about the app, which might make you think twice whenever you want to use Venmo.
In this article, we'll see a couple of reasons why you shouldn't use Venmo for your financial transactions.
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Why You Shouldn't Use Venmo
There are many reasons why you shouldn't use Venmo, which include:
1. Hidden Fees and Inflexible Fee Structure
Venmo says it charges as low as 1.9% + a $0.10 transaction fee. However, this rate only applies to purchases made directly within the app or through QR codes. There's a sad reality behind this fee structure and it is far less transparent than it appears.
Using a credit card to make a payment incurs a 3% fee, and other forms of transactions may also incur additional charges. This lack of transparency and inflexible fee structure can quickly eat into your funds, making Venmo an expensive option for frequent transactions.
2. Privacy Concerns: A Public Ledger of Your Finances
Unlike traditional payment methods, Venmo's default setting makes all peer-to-peer transactions public, except for the payment amount. This means that anyone with a Venmo account can see your Venmo transactions, potentially exposing all of your sensitive information to anyone on Venmo.
Of course, Venmo lets you change this default setting from your account profile but this lack of privacy raises serious concerns about data security and the potential for tracking and data mining.
3. Limited Customer Support: A Frustrating Experience
Customer support is one of the most crucial aspects when dealing with digital payment services.
Venmo's customer support has been consistently criticized for its slow response times and lack of resolution.
Users have reported facing difficulties in reaching out to Venmo for assistance with account issues or transaction disputes. You can see that all around social platforms such as Reddit and even Quora.
This lack of responsive customer support can be extremely frustrating, especially when dealing with financial matters that require prompt attention such as accidental payments—they typically ignore you in most cases.
As for identity verification, I can't say they're the best at this since they take longer time to get you through as compared to other payment services like Cash App.
4. Security Risks: Protecting Your Hard-Earned Money
While Venmo has implemented security measures, no system is 100% immune to breaches as I always say.
Fraudulent activities and unauthorized access to Venmo accounts are not uncommon on Venmo, and being a victim of any of these isn't the best thing you can wish for someone.
You should always be on your guard and be cautious when doing business on Venmo—which is why Venmo recommends customers only do business with people they know and trust.
5. Don't Use Venmo As A Bank
If your primary reason for using Venmo is to substitute your traditional bank—that could be a really bad idea—even the Consumer Financial Protection Bureau advises against such practice. And personally, I discourage you from doing that. Unlike traditional banks, payment services such as Venmo are more often vulnerable to scams.
Again, unlike with traditional banks, there's no guarantee that your funds on Venmo are FDIC-insured. Most banks nowadays are backed up by FDIC insurance and this should cover your funds in case the bank fails—but if Venmo fails, your money is probably gone.
Why You Shouldn't Use Venmo For Business
Using Venmo for business comes with a couple of drawbacks, some of which include, potential tax issues and privacy concerns. If you're using your personal Venmo account for your business, you'd be typically exposing your personal information which is not good for business and is equally prohibited by Venmo.
While Venmo's ease of use and social networking features make it appealing for casual transactions, its drawbacks far outweigh its benefits for managing your finances. The hidden fees, privacy concerns, limited customer support, and security risks make Venmo a less-than-ideal choice for your primary payment needs.
Instead, consider traditional payment methods like bank accounts, credit cards, or more secure mobile payment options that offer better protection, transparency, and customer support.