Venmo: A Beginner’s Guide to Safe Mobile Payments

Venmo is a PayPal-owned mobile payment app that simplifies sending and receiving money online. It's convenient and can be used for free with friends and family.

But, like any app—especially one tied to your bank—it's important to know how to use Venmo safely. This article explains why people use Venmo, how you can start using it, and what to remember to avoid scams.

How Can You Use Venmo?

In general, you can use Venmo in two different ways:

• Pay back friends and family for shared expenses.
• Purchase products or services from Venmo partners.

Examples of how you might use Venmo include:

• Paying for your part of a shared meal.
• Sending a roommate your share of the rent.
• Requesting gas money from a friend.
• Paying for takeout ordered from a food app partnered with Venmo.
• Other non-business payments with people you know and trust.
• Investing in cryptocurrencies.

Whatever you use Venmo for, start by linking your bank account or debit or credit card, and then you can quickly send and receive payments to or from anyone you know who uses the app.

You can also send payments and requests to non-users, who are then prompted to sign up. You get a notification if they sign up, but if they don't you have to collect or send the money using another method.

Setting Up Venmo

When you first sign up, your weekly spending limit is $299.99. Once you successfully confirm your identity by providing some personal information, your spending weekly limits can vary up to $60,000 per week.

Venmo is free if you send money from your bank account, debit card, or Venmo balance. If you send money using a credit card, Venmo charges a three percent fee. There are no Venmo fees to receive cash or make in-app purchases.

Once you're set up, you can use Venmo nearly any way you like: pay a friend back for dinner, send your roommate your share of the cable bill, or request payments from friends or family for a shared Airbnb or Vrbo rental. Be sure to only use Venmo with people you know and trust.

Mobile App Payments and Social Media

You can also connect your Venmo account to partner apps such as Uber Eats, Starbucks, and Fandango. Then you can use Venmo to pay for purchases using those apps, and even split bills for cab fare, food, or other shared expenses.

Mobile businesses can add Venmo as a payment option at checkout, much like you can already pay with Apple Pay, Google Pay, PayPal, and Samsung Pay.

Venmo also has a social media side to it, which is optional. You can make your purchase public, broadcasting it to your network of Venmo friends, who can then like and comment on it. It's easy to add friends if you give Venmo access to your phone's contacts.

Is Venmo Secure?

Venmo automatically uses multi-factor authentication when you use the app from a new device, which helps prevent unauthorized logins to your account. You can also create a PIN or enable biometric unlock for extra security.

There are, of course, risks involved with using Venmo:

• Scams when transacting with strangers, including false claims and reversed transactions.
• Non-payment from strangers for products or tickets you've sold and shipped to them.
• Lack of buyer and seller protection in cases of fraud or non-payment.
• Security breaches and fraudulent transactions on your account.

There's an easy way to avoid those first three risks: don't talk to strangers. We can't stress enough how important it is to use Venmo only with people you know and trust.

While you can reverse payments on Venmo, it can be done only with the permission of the other user and only if they haven't already transferred those funds to a connected bank account.

It's important to understand that while receiving payments on Venmo appears to be instantaneous, it takes a few days to process. In essence, Venmo is temporarily lending you the balance until the bank clears the transaction.

It's similar to when you deposit a check; even if you can access the funds right away, it doesn't clear for a few days. If the check bounces, your bank removes the funds from your account, even if it's days or weeks later.

Avoiding Fraud

To keep your account safe from fraudulent transactions, change your password regularly, and don't use a password you also use elsewhere.

Use a PIN and check your Venmo activity as carefully as you would a bank or credit card statement. Report instances of fraud to Venmo and your connected bank or credit card account immediately.

Implementing all of these practices will keep your money safe.