In the world of digital finance, peer-to-peer payment apps have become increasingly popular for their ease of use and convenience. However, like any tool in the digital age, it’s essential to use it wisely and securely. In this comprehensive guide, learn everything you need to know to make your Venmo transactions secure and hassle-free.
Venmo offers a secure and convenient way to transfer money, whether splitting a bill with friends, paying a family member, or even making business transactions. Bolster your Venmo security by enabling features like two-factor authentication and setting payment limits. By following guidelines, you can enjoy the convenience of Venmo while keeping your financial transactions safe and efficient.
How Does Venmo Work?
Venmo connects your bank account or credit/debit card to your Venmo account. Once you’ve combined these two accounts, you can begin transferring funds back and forth between the two. All transactions are subject to fees depending on how you fund them; for instance, if you use a debit or credit card, there may be higher fees than if you use your bank account.
Setting up Your Account
Setting up your Venmo account is easy. You only need an email address, phone number, and password to start. It is simple to create a Venmo account, and the entire process takes a few minutes. An instruction manual for setting up your Venmo account is provided below:
Get the Venmo App
The Venmo app is accessible for Android-based smartphones on both the iOS App Store and the Google Play Store. Look for “Venmo” and download the application.
Open the app once you’ve installed it. A welcome screen will be displayed to you. To register for a new account, tap “Sign Up.”
Enter Your Phone Number or Email
You must enter your phone number or email address while using Venmo. Pick the solution you like best. As Venmo will send a verification code to the phone number or email address you supply, double-check that you can access it.
Set up a Password
For your Venmo account, pick a strong password that you can remember. Usually, a secure password consists of a mix of letters, numbers, and special characters.
Check Your Email or Phone Number
Venmo will send a verification code to the phone number or email address you supplied. For the app to verify your contact information, enter this code.
Link a Payment Method
You need to link a payment method to transfer or receive money. You can connect your bank account or credit/debit card with Venmo.
You must enter your account and routing information to link a bank account. You must provide the card number, expiration date, and security code to link a card. If desired, you can connect other payment options.
Verify Your Identity
Depending on your activities, Venmo may request additional identity verification. Your legal name, birth date, and the final four digits of your social security number could be included in this. Venmo uses this data to verify your identification and guarantee that you follow all financial laws.
Set Up a User Profile
You may personalize your user profile by including a photo and a brief bio. To locate friends that use Venmo, you can also link your Venmo account to your Facebook account.
Configure Security Settings
Consider turning on two-factor authentication in the Venmo app for more security. This adds a level of protection to your account.
Start Using Venmo
You can start using Venmo as soon as your account is created. You can split bills, give money to friends, and pay companies. Type in the recipient’s phone number, email address, Venmo username, desired amount, and necessary notes. Once you confirm the transaction, everything is set.
Understand the Lower Threshold for Tax Year 2023
Beginning in tax year 2023, the IRS will require a lower threshold of at least $600 to be collected by payment services companies like Venmo. If you receive $600 or more for goods and services through them without first providing your tax information, they must withhold 24% of those payments and send them to the IRS as backup withholding.
This is an important measure that ensures applicable taxes due on these payments are paid.
To avoid backup withholding on payments you collect, provide your tax ID in the Venmo app.
Sending Funds via Venmo
If we wanted to send money directly from our bank account, all we would need would be their name and email address provided during setup (in other words, when setting up our profile). From there, follow these simple steps:
- Choose ‘Send Money’ from the home screen of your app
- Input either their email address OR phone number where you wish for them to receive the funds (or select someone from your contacts list who already has an existing profile)
- Enter how much money we want to send over
- Add a comment so the recipient knows why exactly we sent money over (optional)
Receiving Funds via Venmo
Let’s look at what happens if we want to receive funds instead! For those occasions when someone wants to give us some cash through their own Venmo profile:
- Open up your app
- Select ‘Receive Money’
- Input the amount of cash requested
- Press the ‘Request’ button
- Feedback confirmation message confirming the request was successful
- Wait for the payment sender’s response that confirms the completion of a transaction
- If approved, check the balance & withdraw cash!
That’s all there is to it! Payment transactions will occur without hiccups as long as both parties have sufficient amounts in their respective accounts/ wallets.
Pros & Cons of Using Venmo
|Easy signup process involving few steps||Fees incurred when transferring funds from a Credit / Debit Card|
|User-friendly layout making navigation straightforward||Transfer times may take longer compared to other digital wallet services|
|Multiple ways of linking different funding sources such as Bank Accounts and Credit/Debit Cards||Sharing profile posts publicly can result in unwanted attention|
|Connections allowed with contacts already existing within the user’s contact list||Limited international usage compatibility|
|The ability for users to keep track of all past financial activities within the history page|
|Good customer service support|
Tips for a Seamless Venmo Experience
When doing transactions, pay attention to the privacy settings. Because Venmo offers social capabilities that allow for presenting your transactions to others, consider whether your payment should be private or public.
Clear and succinct descriptions should always be provided for your transactions. This aids in keeping the recipient and you both aware of the payment’s intended use.
Send your money on time. As with any other financial transaction, paying back debts owed to others as soon as possible is polite.
Avoid Putting Memos Too Often
While descriptions are helpful, avoid putting too much sensitive or personal information in the note. Maintain its connection to the transaction.
Keep It Professional
Be professional in your descriptions and communications if you use Venmo for business transactions. Sending or requesting payments with legible invoices or receipts is a good practice.
Before approving the transaction, ensure you give money to the right individual. Sometimes, the usernames on Venmo are similar.
Making Appropriate Use of Venmo’s Social Features
Customise Privacy Settings
Review and modify your privacy settings to limit who can see your transactions. Payments can be made in private or shared just with selected friends.
Be Aware of Your Comments
Remember that emojis and comments on open transactions are visible to other users. When leaving comments, exercise caution to protect your privacy.
Consider the Audience
Remember that your connections can view your social media activity on Venmo. Share private or delicate information privately wherever possible.
The Bottom Line
With its many benefits and features accessible at no cost, it’s easy to see why so many people rely on Venmo daily. Whether paying back a friend quickly, sending large sums across the country, or sharing expenses among groups, this powerful application covers many use cases! So now that our hindsight is clear, why not jump on board?
Q: Is it secure to make financial transactions using Venmo?
A: To protect user data, Venmo uses encryption and security methods. However, using the correct privacy settings and only doing business with reliable people is essential.
Q: Are there any charges for using Venmo?
A: Venmo is typically free when using a connected debit card or bank account to send and receive money. Fee fees could be incurred when using a credit card or international transaction.
Q: When transferring money via Venmo, how long does it take?
A: Transfers to a linked bank account take 1-3 business days. Although a minor cost is involved, instant transfers to a bank account are quicker. Users of Venmo typically receive transfers instantly.
Q: How can I prevent backup withholding on Venmo?
Dawn Papandrea is a freelance writer and journalist has covered credit cards, mortgages, and other personal finance topics for more than 10 years. Her work has been featured on Bankrate, CreditCards.com, U.S. News & World Report, CompareCards.com, and many others.