It’s hard to believe, but before technology drove every movement in our lives, we had to go places to get stuff done and hand write checks to make a purchase. If you wanted to send money to a friend or family member in a different state, you had to use Western Union or a similar money transferring system that felt unsafe and took weeks and sometimes months to transfer. Now, it’s all at our fingertips on your smartphone devices so we will never have to worry about being paid back or long wait times again.
Various new money transferring apps have come out of the woodwork as of late including the Square Cash app and Venmo, a mobile payment service owned by PayPal. Even Snapchat and Facebook have jumped on the money transferring bandwagon to cash in–pun intended–on the idea. These apps are specifically designed for person-to-person (P2P) electronic payments within the country and typically have little to no cost for the user.
So, how do money-payment apps make money?
Since Venmo is a free platform, the company has to turn to alternative revenue generators. This means instead of collecting money through intrusive advertisements, they charge a 3% fee for customers using credit cards rather than their direct bank accounts.
Are electronic payment apps safe?
As most people think when they first hear about money transferring apps, they are skeptical on the security of the app. How do they know that no one is going to hack into their account or steal their phone to transfer money? The truth is, they don’t. While some of the most popular apps have fortified firewalls protecting their customers, it is a widely known fact that nothing on the internet is safe. Venmo has had its fair share of hacks since its development in 2009 and so have plenty of the various money apps on the market.
In order to combat these issues, Venmo security can detect when there has been an unauthorized login to your account. This can give the customers a slight peace of mind, but if safety is a number one priority there are some measures worth taking.
Protecting Financial Information with Electronic Payment Apps
- Never use a money transferring app with a stranger online or in person. You run the risk of the transaction being fraudulent, which is not covered by most transferring platforms.
- Take the more expensive route and link your credit card instead of your bank account. Credit cards offer stronger protection against fraud so if you’re ever hacked you have a better chance of getting your money back.
- Change your password often and apply a pin code to your account. When passwords are changed frequently you are less likely to get hacked.
Overall, Venmo and other money transferring apps are a dream come true to the regular socialite who has lived a life of IOU’s that never get paid off. Like anything electronic, there is always a risk, however, by taking the right precautions electronic payment apps like Venmo and the Cash app can expedite P2P payment processing.