Are Venmo and Zelle safe?

By Emma Bennett

Cash transfer apps like Venmo and Zelle have become so common on college campuses that a University of Georgia student compared their popularity and recognition to that of a Coke bottle.

 “It’s a very essential thing that people use often. I can’t think of anyone in my life that doesn’t have Venmo,” UGA junior Mavi Qureshi said. “Everybody in college that I know of uses Venmo.”

According to Investopedia, cash transfer apps allow users to transfer money quickly and easily, either from peer-to-peer or bank-to-bank. UGA sophomore Ashrit Jada is one of many students who uses cash transfer apps for everyday payments such as club fees, donating to charities on campus or splitting utilities.

“I use it to pay my roommate,” Jada said. “He signed up for internet and TV for both of us, and it’s under his account, so I pay him on Venmo for that.”

Everett Wilkerson, a certified financial planner at Capital Investment Advisors, explained, Zelle is a direct bank-to-bank transfer, similar to electronic funds transfer, while Venmo is outside of the banking system. Because of its set-up, Wilkerson was concerned about Venmo’s security.

“All technology is susceptible to hackers and people that may be trying to fraudulently obtain your information as well as your actual money,” Wilkerson said. “If Venmo were to be hacked, then the biggest concern is that they can actually pull dollars out of your bank account and send them elsewhere.”

In 2018, the Federal Trade Commission (FTC) filed a complaint against Venmo for failing to disclose certain business practices, including privacy and security practices. The complaint challenged Venmo’s claim that the app had “bank grade security systems” to protect users’ financial information, saying Venmo actually failed to implement even simple safeguards until March 2015. Now, Venmo’s website only cites encryption as a security practice to protect account details.

“When it comes to those more important things, they’re going to leave that up to ‘buyer beware’ or you could have read the terms and conditions, or you could have changed your privacy settings,” Wilkerson said.

An article by Forbes said both Zelle and Venmo have security features including data encryption, fraud protection, purchase verification and multifactor authentication to protect users’ information and transactions. 

Excluding technical difficulties, neither Qureshi nor Jada have experienced any security issues while using Venmo or Zelle. Qureshi and Jada’s biggest safety concern is sending money to the right person, so both have developed strategies to help reduce the risk.

“If I’m with the person, I’m like ‘Is this you?’ and then that usually solves the problem,” Qureshi said.

Qureshi also mentioned using Venmo’s verification feature for any transactions larger than $20, while Jada looks at usernames and profile pictures to confirm the person’s identity.

Wilkerson recommends similar strategies to protect transactions if students insist on using cash transfer apps, even though he prefers paying with cash.

“I know it’s not convenient, but I like the good ole cash method,” Wilkerson said. “[Venmo] does make things a lot easier, but again stay vigilant…and double check who you’re sending it to.”

While Jada rarely pays with cash due to the inconvenience of going to an ATM, he acknowledged that students concerned with the security of cash transfer apps could always use cash instead. Jada noted that he does not worry about his Venmo transactions.

“I feel pretty secure,” Jada said. “I don’t really see how Venmo is too complicated or a security problem. It seems fine for a college student to use.”

Emma Bennett is a journalism student at the University of Georgia.

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