Don’t store cash in Venmo and PayPal, US regulator warns

[pixy0stix]

www.cnn.com/2023/06/02/investing/payment-apps-safety/index.html

I never thought about people who just keep their money in aps.

[smock]

I'm a freelancer, so I get paid through PayPal and Venmo. I usually transfer money to my bank account once a month. But I should probably do it more often. 😬

[definitelyO]

I didn't even think about it. hmmmm - I keep my money that comes into venmo sitting in venmo usually - but not usually a lot - but I have in/out and then it just kind of stays at a balance. (it's at $600 now)

I would never use it as a saving account.

[plutosmoon]

I pay my rent via Venmo, it pulls it from my bank account, I don't keep money in the app. Venmo did confuse me a bit when I first used it, I thought if I had any money in the app, it would use those funds when I paid someone, but it doesn't seem to do that. Now as soon as I get any payments, it gets transferred out to my bank account almost immediately. I know a lot of people who just let their venmo money sit there.

[katfco]

Jun 2, 2023 17:25:07 GMT -5 plutosmoon said:

I pay my rent via Venmo, it pulls it from my bank account, I don't keep money in the app. Venmo did confuse me a bit when I first used it, I thought if I had any money in the app, it would use those funds when I paid someone, but it doesn't seem to do that. Now as soon as I get any payments, it gets transferred out to my bank account almost immediately. I know a lot of people who just let their venmo money sit there.

With paypal there's an option to use the existing balance first instead of pulling from the bank. 

[Deleted]

Jun 2, 2023 17:25:07 GMT -5 plutosmoon said:

I pay my rent via Venmo, it pulls it from my bank account, I don't keep money in the app. Venmo did confuse me a bit when I first used it, I thought if I had any money in the app, it would use those funds when I paid someone, but it doesn't seem to do that. Now as soon as I get any payments, it gets transferred out to my bank account almost immediately. I know a lot of people who just let their venmo money sit there.

It will pull from funds already in the app, but only if it will cover the whole transaction. So if I have $20 in my Venmo and want to buy something for $25, it won’t use the the $20 already there and charge me $5 — the whole transaction comes from my bank account.

I don’t think I’ve ever had more than $150 or so in my Venmo. Transferring is really easy and there’s no real reason not to.

[livinitup]

When we recently set up Venmo, my H set up an entirely different bank account that we dedicated only to Venmo transactions. While it didn’t exactly seem like overkill, I thought “most people don’t do this for Venmo”.

He deals with a good deal of internet security issues.

[wanderingback]

Yes I always tell my partner this! He doesn't keep a ton in there, but he is self-employed and does get paid via Venmo sometimes so I always tell him not to keep the money there and to transfer it immediately. I've hard of issues with Paypal and Cashapp keeping people's money as well, so I don't trust the companies too much, but they are regular payment options these days and I'm sure they're not going anywhere.

[loira]

I got rid of my PayPal account when I stopped freelancing for international clients.

Canada has a system called interac e-transfer that all our banks are compatible with. You send someone an e-transfer, it comes into their email and that email invites them to sign into their own bank account to claim it. I believe it's a more secure tech, but I'm not sure it would work in the US because there are so many different banks and it seems like it would be difficult to get them all on board.

[wanderingback]

Jun 3, 2023 20:38:05 GMT -5 loira said:

I got rid of my PayPal account when I stopped freelancing for international clients.

Canada has a system called interac e-transfer that all our banks are compatible with. You send someone an e-transfer, it comes into their email and that email invites them to sign into their own bank account to claim it. I believe it's a more secure tech, but I'm not sure it would work in the US because there are so many different banks and it seems like it would be difficult to get them all on board.

We have something called zelle which is similar. I just looked and it says it's in 1,700 banks and per google there are 4,100 commercial banks in the US. So they're not quite available in half of banks.

I don't know specifically about security but with Zelle there is no recourse to get your money back once you've sent it to someone, so even if you accidentally send it to the wrong person, but obviously it's more secure in that it goes directly in to your bank account and not a separate account like paypal or venmo. I do know people can get their money back with paypal though.

[loira]

Jun 3, 2023 20:59:58 GMT -5 wanderingback said:

Jun 3, 2023 20:38:05 GMT -5 loira said:

I got rid of my PayPal account when I stopped freelancing for international clients.

Canada has a system called interac e-transfer that all our banks are compatible with. You send someone an e-transfer, it comes into their email and that email invites them to sign into their own bank account to claim it. I believe it's a more secure tech, but I'm not sure it would work in the US because there are so many different banks and it seems like it would be difficult to get them all on board.

We have something called zelle which is similar. I just looked and it says it's in 1,700 banks and per google there are 4,100 commercial banks in the US. So they're not quite available in half of banks.

I don't know specifically about security but with Zelle there is no recourse to get your money back once you've sent it to someone, so even if you accidentally send it to the wrong person, but obviously it's more secure in that it goes directly in to your bank account and not a separate account like paypal or venmo. I do know people can get their money back with paypal though.

With e-transfer, there's a password prompt to collect the money (beyond the password to sign in to your account) so if you send it to the wrong person they ideally wouldn't know the answer to the password question asked by the sender. Assuming the sender puts in a security question that's strong enough and likely only known to the receiver. I think there's also a 30 day window in which you can cancel your transaction. Beyond that it might be up to individual banks but I've never enquired about it because honestly everyone uses e-transfer here and we've had it for around 20 years.

[hermione]

Jun 3, 2023 20:59:58 GMT -5 wanderingback said:

Jun 3, 2023 20:38:05 GMT -5 loira said:

I got rid of my PayPal account when I stopped freelancing for international clients.

Canada has a system called interac e-transfer that all our banks are compatible with. You send someone an e-transfer, it comes into their email and that email invites them to sign into their own bank account to claim it. I believe it's a more secure tech, but I'm not sure it would work in the US because there are so many different banks and it seems like it would be difficult to get them all on board.

We have something called zelle which is similar. I just looked and it says it's in 1,700 banks and per google there are 4,100 commercial banks in the US. So they're not quite available in half of banks.

I don't know specifically about security but with Zelle there is no recourse to get your money back once you've sent it to someone, so even if you accidentally send it to the wrong person, but obviously it's more secure in that it goes directly in to your bank account and not a separate account like paypal or venmo. I do know people can get their money back with paypal though.

Our house cleaner prefers payment through Zelle bc the money goes directly to her bank account. I wonder if it will increase in popularity bc of that.

[ESF]

I think many people storing money in payment apps are the unbanked. If your credit is bad, you don't have the right kinds of ID or are not a citizen, or just can't afford bank fees, payment apps provide a way to hold cash without actually having to carry it around.

[gerberdaisy]

I don't know all of the specifics, but I'd be wary of Zelle too. Here is one article from the NYT, but the risk of scammers and fraud is pretty high. Plus its access to your bank account and banks have not been quick to reimburse.

www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html

[Deleted]

Jun 5, 2023 10:13:08 GMT -5 gerberdaisy said:

I don't know all of the specifics, but I'd be wary of Zelle too. Here is one article from the NYT, but the risk of scammers and fraud is pretty high. Plus its access to your bank account and banks have not been quick to reimburse.

www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html

This is paywalled for me…but my bank pushes Zelle as a free service they provide. When I Zelle someone money, i do it through my bank’s app, not the Zelle app. So I wonder if my bank would be more willing to reimburse in case of fraud?

[gerberdaisy]

Jun 5, 2023 10:53:28 GMT -5 @villainv said:

Jun 5, 2023 10:13:08 GMT -5 gerberdaisy said:

I don't know all of the specifics, but I'd be wary of Zelle too. Here is one article from the NYT, but the risk of scammers and fraud is pretty high. Plus its access to your bank account and banks have not been quick to reimburse.

www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html

This is paywalled for me…but my bank pushes Zelle as a free service they provide. When I Zelle someone money, i do it through my bank’s app, not the Zelle app. So I wonder if my bank would be more willing to reimburse in case of fraud?

here's the gift link


www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html?unlocked_article_code=gdmHR3klIUWOqtHJk29RpCXHS1vMpjzd2CdJewidN6aI9JHeshGSzniJkddJPPZZZXWlldDLzxxLcTPnXPDHG3PA12WLCSgk95TX1GCSYm48ByMqjN3S2fQ_DMuH-MJ9_o7Q9T1i6XzdIByMplAnwW97ValdTIirERTDNDO-eSUUG9p4TyetTQbKA4CH_SYvDyESFR1XNzDn2hM87eE9G69_SteBDi8Zwc-9MM3FaOA6_Lr6Hpn-L0Gqry5ZcL82IODQuHp8EDE_m9te5jqKKv5d2dAOCjQ8sCwH2oIGwtRHvM-XfzgjaRuILGRbNfuAfuzpUfG7lcvUyYT_tYdLJPjo29Ig&smid=url-share

And here is a link referencing actions in Senate.

www.banking.senate.gov/newsroom/majority/americans-money-senators-regulators-zelle-protections-payments-crooks

Zelle is owned by banks and offered as a free service. I would need to do more reading to  get back up to speed (been a while), but I try not to use Zelle.

[ESF]

Jun 5, 2023 10:53:28 GMT -5 @villainv said:

Jun 5, 2023 10:13:08 GMT -5 gerberdaisy said:

I don't know all of the specifics, but I'd be wary of Zelle too. Here is one article from the NYT, but the risk of scammers and fraud is pretty high. Plus its access to your bank account and banks have not been quick to reimburse.

www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html

This is paywalled for me…but my bank pushes Zelle as a free service they provide. When I Zelle someone money, i do it through my bank’s app, not the Zelle app. So I wonder if my bank would be more willing to reimburse in case of fraud?

 Your bank app is using Zelle technology. Zelle is basically a membership system for banks. 

The fraud being done won't turn on  the app you use. It's a problem with the technology that exists regardless of your bank or app. Because it only requires the email address associated with your account and a verification code to remove money from someone's bank account, scammers are getting sophisticated in finding ways to get a verification code. 

There's no great way to avoid being scammed other than to just be hypervigilant about weird requests or texts that come in and don't pay unknown people through Zelle - only friends, family, etc. I would not use it for Facebook marketplace purchases or similar. There's some weird scam that involves them porting your cell phone number into Google Voice so your verification codes get sent to their google voice number. So be careful about any alerts you get about google voice.

While there is a whole regulatory scheme in place requiring the refund of unauthorized debits in most instances, there's a legit dispute as to whether that regulatory scheme requires banks to reinstante the kinds of payment transactions that are being run through Zelle.  Some banks are better than others about refunding. But it's probably going to depend on the circumstances of the fraud, not which app you use. It's probably going to take an act of Congress to fix the problem.

[Deleted]

Jun 5, 2023 11:02:20 GMT -5 gerberdaisy said:

Jun 5, 2023 10:53:28 GMT -5 @villainv said:

This is paywalled for me…but my bank pushes Zelle as a free service they provide. When I Zelle someone money, i do it through my bank’s app, not the Zelle app. So I wonder if my bank would be more willing to reimburse in case of fraud?

here's the gift link


www.nytimes.com/2022/03/06/business/payments-fraud-zelle-banks.html?unlocked_article_code=gdmHR3klIUWOqtHJk29RpCXHS1vMpjzd2CdJewidN6aI9JHeshGSzniJkddJPPZZZXWlldDLzxxLcTPnXPDHG3PA12WLCSgk95TX1GCSYm48ByMqjN3S2fQ_DMuH-MJ9_o7Q9T1i6XzdIByMplAnwW97ValdTIirERTDNDO-eSUUG9p4TyetTQbKA4CH_SYvDyESFR1XNzDn2hM87eE9G69_SteBDi8Zwc-9MM3FaOA6_Lr6Hpn-L0Gqry5ZcL82IODQuHp8EDE_m9te5jqKKv5d2dAOCjQ8sCwH2oIGwtRHvM-XfzgjaRuILGRbNfuAfuzpUfG7lcvUyYT_tYdLJPjo29Ig&smid=url-share

And here is a link referencing actions in Senate.

www.banking.senate.gov/newsroom/majority/americans-money-senators-regulators-zelle-protections-payments-crooks

Zelle is owned by banks and offered as a free service. I would need to do more reading to  get back up to speed (been a while), but I try not to use Zelle.

Ah. So people are getting scammed, not hacked. I think it’s shitty, but I can understand banks not covering payments that you authorize, even if you’re scammed. I mean, if I get scammed and go to the ATM to get $$$, and give that to the scammer, I don’t expect the bank to pay me back. Same if I give my debit card # to a scammer. It sucks, and I wish there was some way for people to be made whole after being scammed.

But if someone can hack into my account because the bank app leaked my info, they damn well better cover it.