There’s an increasingly popular way millennials send and receive money these days. It’s an app called Venmo, and it makes transferring funds between friends as simple as sending a text.
“I like [Venmo] because it allows me to be convenient and efficient,” said University of South Florida student and Venmo user Kathleen Tan.
“It’s very accessible and it’s very easy,” said USF student Eldin Cabreros. “I think that’s why it’s very popular.”
Venmo can be used to split costs on everything from food to Ubers. You can pay or request money, which comes in handy for group purchases such as T-shirts for a club.
“It’s so much easier, because we don’t have to deal with cash and keeping a list, ‘cause I would always have to write a list of who has paid me and who hasn’t,” Tan explained.
Users can let money build up in a Venmo account or transfer it to a bank account for free. However, if you want to do an “instant transfer” to your debit card, there’s a 25 cent fee.
Most Venmo services free
Many of Venmo’s services are free when users link their accounts to a debit card or bank account. However, if you like a credit card to make payments, Venmo does charge a 3 percent processing fee.
Venmo also has a social media aspect, which adds to the app’s appeal. Users can react to transactions, and see a feed on what their friends are spending money on.
“I think it’s fun, just because I’m nosy,” Tan said, laughing.
Venmo is owned by PayPal. Launched in 2012, the service has been around for a few years, but it really took off in popularity in the past year or so.
“I’ll forget my wallet one day and my friend pays for me, and I’ll be like, ‘Oh, ok, I’ll Venmo you this amount,’ so she doesn’t lose money and I don’t,” Tan explained. “It’s fair.“
Notes for safe use
You do have to be careful not to send money to the wrong person while using Venmo. A built-in safety feature does help users to avoid mistakes.
“It’ll ask you, ‘Are you sure?’ and also if don’t have mutual friends, it’ll ask you, ‘Are you sure you know this person?’ and that’s a really nice feature,” Tan said.
As a safety precaution, it’s a good idea to avoid making large payments using Venmo.
“Anything over $60, then I wouldn’t want to use Venmo to pay that amount,” Tan told us.
Finally, the app uses bank-level security and encryption to protect users from hackers, but they have received complaints about theft of funds related to hackers changing a user’s password or email address. Security experts, however, say much of that is likely due to user error.
Stay disciplined with spending
Venmo also allows users to track how much they’re receiving and spending.
“I’ll be spending $2 here, $2 there, and at the end of the day, I don’t realize I’ve spent a total of $15,” Tan said.
It sure is convenient, but it is easy to spend more than you intended, so it’s important for Venmo users to be disciplined and keep track, so you stay within your budget.