Why I Don’t Use VENMO and What You Need to Know if You Do
Last week, in a manner of minutes, President Biden’s Venmo account was hacked and the privacy of his contacts and payments made to them were exposed. The account was compromised by ordinary digital media sleuths, not high-level Russian hackers. That’s how open the Venmo platform is. Read more about the hack here.
In my courses, and also with my accounting/consulting clients, I DO NOT recommend using the payment app Venmo. I realize it’s a very popular app and perhaps you use it already, or have been asked to use it, because it is a super convenient way to pay and get paid. But how private is your payment data? I’m going to highlight the risks involved, along with strategies to minimize this risk so that you are protected.
FYI, I am referring to the personal Venmo app, which most people use, even for business purchases (not appropriate). Venmo does have a business app which has more controls, but I am going to focus on the personal app, because frankly, I have yet to see anyone use the business version...
The Problem:
LACK OF PRIVACY: Venmo transactions are public by default. The article referenced above states it perfectly: “Venmo is a peer-to-peer cash transfer app that is used by friends to split bills, share the cost of a taxi ride home or manage other small expenses.”
From the official Venmo site, it states “settling up feels like catching up. Send and receive money with Venmo friends and express yourself in each payment note.”
Express yourself? Really? Basically, think of Venmo like Facebook, IG, or any other social network. People in your network can see your payments, comments and emojis in your “feed.” Do you really want them seeing who you paid, how much and for what reason? WAY TOO MUCH INFORMATION. There is enough cyber fraud out there as it is. Don’t serve your data to them on a plate!LACK OF CLARITY: This is the other reason I do not, and recommend my clients do not use Venmo. When you look at your banking activity, you will see a lot of random Venmo transactions with literally no additional details. If you have a business or a side-hustle and people pay you (or you pay them), you have to jump through additional hoops to open the Venmo app and view/download the transactions, and then classify them properly in your bookkeeping so that you get the clarity you need for taxes and to manage your business. I teach how to do this in my Quickbooks Online Course but, honestly, it’s a mess. I’m all about one-stop shopping for SIMPLICITY and CLARITY, and Venmo makes it too difficulty
Strategies/Alternatives:
I recommend using payment systems such as Zelle (bank to bank cash transfers) or even PayPal, as these systems are for payments only and not social feeds. The main point is to make sure you know the person/business you are transferring to and you verify the details before completing the transaction. There are other merchant payment systems such as Stripe, Square and Quickbooks Payments that are good if you have a business.
If you continue to use Venmo, be sure to check your privacy settings! Turn off any that may expose your network and your payment activity. Also, be sure to check these settings every time you update the app, as they curiously have a tendency to return to the “open” default after updates.
Finally, If you use Venmo in your business, consider upgrading to the business version, but again, consider the risks, and check the privacy settings to protect your data.