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One of the nice things about living in Chicago is the ease at which my wife and I can meet our friends for a casual weekend dinner. Two or three couples get together for a nice dinner somewhere, we have a few cocktails and I wake up with a decent hangover the next day. Rinse and repeat. In the middle of all these small plates and overpriced table wine is the check, and someone has to pay the piper.
“Here, I’ll just put it on my card and you guys can pay me back later.”
(Long pause as no one wants to speak up and rebuff the offer because then you’re the one that has to calculate the tip and who has the nerves to figure out how to deduce 20% from $287.48 under pressure and three old fashions)
Now the common practice is to Venmo that person that night or the next day and forget about it. But what if Venmo wasn’t exactly the revolutionary tool we were led to believe? See Venmo is a phenomenal idea that rode off the coat tails of Chase Quick Pay and said, “why not just make this awesome service available to everyone with a bank account?” This concept was revolutionary as this type of service was only be available to commercial clients and actually cost money on a per transaction basis. Pay a fee when I send Becky money for my challah french toast and mimosa?
No thank you.
But while Venmo is the best innovation to come from the financial industry in the last decade, it is easily the worst way for you to pay people for dinner, dog walking or drugs.
Venmo is owned by Pay-Pal, and while I am sure it puts your financial security top of mind, it is no bank. Banks are the most regulated industry in the country and it is not even close. This means ensuring your finances and personal information is the most secure it can be. So secure, in fact, major banks pay over $1.5 billion a year to make sure no one but you can access your shit.
See you need to make sure your money is safe. And using Venmo almost ensures you are doing just the opposite. Financial security is literally priority #2 (after making money) at a bank due to the reputational, regulatory and monetary risk associated with a security breach. That is why bank’s developed Zelle. It works just the same as Venmo (less the snowflake emojis) but in a significantly safer manner.
That being said, fin-techs pose a significant risk to your typical retail bank. Why bother going into a branch when you can do everything from your couch in your underwear? I certainly don’t want to deal with you bitching about a $30 overdraft fee just as much as I know you don’t want to come in and interact with me. Isn’t that what we are all looking for? Freedom from personal interaction and confrontation?
With no personal interaction also comes to demise of brick and mortar bank branches. I am hesitant to fully compare how Amazon and other online retailers have proven that people have no problem running their lives from the smart devices because when you are talking about people’s hard earned money, their attitude tends to change. Most people are cool with disputing a lost blender via chat, but a $350 discrepancy in their checking account… well, I need to look into the eyes of the person that wronged me.
The simple point of it is that nearly everything in our life has moved entirely to a digital landscape, so it shouldn’t be much of a surprise that this is where your bank is heading as well. While not fully baked, the technology and security is almost there. Give it 40 years and you will be telling your kids about how when you were their age, you had to use a phone line to get on the internet, people actually drove their own cars, and you had to stand in line to deposit this piece of paper we actually used to denote how attractive you were to the opposite sex…although, I don’t think that very last part will change too much..
Respond
@billfromthebank
Online only banks are the way to go for savings. Places like Discover or Aly Financial offer way higher interest rates than normal banks (1.9% for those two, JP Morgan is at 0.01%). As long as it’s FDIC inspired and you can wait a few days to get your money if you ever need it, can’t go wrong with them.
Doing something as simple as opening an online savings account with discover has been one of the best financial decisions I’ve made. I can’t transfer the money easily, so I usually don’t bother. I have a part of my direct deposit set to go straight to savings (as I think everyone should) and I barely ever look at it. It completely eliminated my habit of my savings account basically being a backup checking account and you’re right about the interest rates too.
While I have been enjoying the deeper dive lately into basic finance articles, this one was a swing and miss. It read like an intro paragraph to an actual article. A bunch of highlights with zero substance. Not trying to be a dick, but just take a deeper dive into one of the aforementioned topics rather then shoot them off rapid fire.
Sure venmo is not as secure as something backed by “Big Bank” but at the end of the day if you are concerned with your privacy, you should avoid the internet all together as Big Gov’t is listening. Making a habit of checking all our accounts daily is a simple 15 minute ritual and having a credit monitoring service covers the other side of your butt
So what youre saying is that it’s better to deal with problems right after they happen rather than prevent them from happening at all. Smart. Also the USG doesnt give a shit about you and your normal bank account but a 15 year old in Bulgaria does.
What I’m saying is you’re screwed either way, the difference in probability from a Zelle to a Venmo of being affected by a data breach in likely so slim that you’d be inconveniencing yourself for such a small slim chance that is not worth it. There’s risk everywhere, you cant hedge it all out. Plus Zelle doesn’t support my CU sooooo venmo!
CU all day
Zelle is by far the superior money sending app since it’s a direct deposit and no waiting time, however some banks haven’t switched to Zelle making venmo the more convenient option
I wouldn’t say banking is the most regulated industry, but its top 3 most regulated. But online banking and peer-to-peer payment systems will become the norm once older generations die. Community banks are starting to seriously evaluate their futures in the banking industry with the rise in popularity with online banking and mobile banking.
Source: am bank regulator
Clown article. Don’t even get the point. Worrying about your 50 dollar venno send is just absurd
There have actually been numerous instances of Venmo accounts being hacked and bank accounts they’re linked to being drained. If you’re that worried, the best course of action would be to have an intermediary bank account with a small balance that’s linked to your main bank account and Venmo. That way, if your Venmo account ever gets hacked, you’re not out that much money.
This article almost feels like an ad for Zelle, similar to how Barstool plugs the Cash app… also wanted to point out that I call BS on the finance industry being the most regulated industry by far (Healthcare is way up there). With that being said, good luck getting people to switch off of Venmo.. it’s too easy
I actually didn’t think that it was an ad for Zelle…it was way too poorly written to be an ad disguised as a blog post (like the Day Trader series). But yeah the finance industry regulation thing was definitely bs. Agreed that no one’s leaving Venmo anytime soon; it’s the network effect. Just like iMessage, even though there’s better products out there (and Zelle really is better than Venmo), everyone uses Venmo and no one uses Zelle so that’s the way it’ll stay.
How much do people keep in their venmo? If your bank account is drained via a hack that came from venmo its the same as your account being hacked outright. The venmo balance is for sure gone but the bank will reimburse your losses after doing their due diligence. Your response is ill informed.
A quick Google search would have shown you that these hacks result in Venmo withdrawals from your bank account that look like legitimate authorized transactions on the bank’s end. So the bank won’t necessarily be able to work with you and dealing with Venmo’s customer service sounds like a pain in the ass. So best case scenario, you’re looking at a massive headache to get your money back and worst case scenario, you’re out of however much you have in your bank.
A quick google search actually reveals quite the opposite id like to see your results. Most of the chatter is from 2015 about a few people all of whom had been reimbursed and since then they have greatly improved their security. I am really not trying to debate really but feel free to google what you just said to quick google search
I did, there’s posts from this past year on Reddit about this happening as well as a news story from Salt Lake City. The chances of this happening to someone are still very small, but it does happen.
Classic example of a 24 7 news cycle distupting a narrative. Thats like saying dont pay restaurants with your credit card because my cousin in salt lake city got his identity stolen. Did it happen? Sure, both things probably did but on a grand scale its perfectly safe any any issue is likely resolved. Feel free to venmo away people
Why do we have a glorified bank teller writing columns about basic banking on PGP? This column literally said nothing except don’t trust Venmo with your money? Between this guy that doesn’t know about anything outside of Checking Accounts, and DeskJockey acting like everyone should hire a Financial Advisor because he asked if we knew what ILITs and 529 Plans are (LOL we’re not 50 year olds with a net worth of $1million+) the personal finance content on this website has been TTTrash
Is there a group that is more full of themselves on this site than the “finance bros” that comment on all of these articles. Some people might find the content useful no reason to be a dickhead about it
To answer your question: No.
Dude you’re the most pompous of them all, I had to make an account just to let you know, but keep telling everyone in the comments they owe you for .15 hours of your advice
I… I don’t even know what to say…..
Hey we found out ATLguy’s name!
I’m not saying I disagree with your comment but what do you want to know? This shit is pretty simple. Save as much as you can through the various methods, incur as little debt as possible and pay it off quickly, and live below your means. There’s your personal finance lesson. Everyone wants to think personal finance is all about acronyms and interest rates and shit, but it’s about self control and diligence. What more do you guys want to know?
Yes, this. UrbanFriar for President
Write the rebuttal and provide what you believe is more practical financial advice for the average 25-35 year-old. Or continue to just bitch.
Another satisfied customer!
But you still clicked.
Yo Captain Cuck, lose some weight
Oh… okay Dickhead Default Avi… like shit posting on anon, too chicken shit to put ya name on it (beyonce voice)
Yea, you guys should totally stop writing articles about finance bc that’s stupid
Source: guy who also writes articles about finance
I mean… if everyone else quits writing finance articles, you’ve cornered the market right?
Hey Jimmy. Listen, you’ll be getting paid a visit by a few men in an unmarked vehicle who have a vested interest in keeping this community safe. There’s is a 0% tolerance policy on being mean and the only way to combat meanness is without face stomping violence is through vicious “evaporation” of your existence and overall purpose, along with your family, your pets, and everyone you know via mechanisms of financial manipulation and manufactured dependency lol