What is Venmo?

Venmo is a mobile payment service that facilitates peer-to-peer money transfers and payments. Having started out as a text-message payment system in 2009, Venmo evolved into a digital payment platform and launched a smartphone payment app in 2012. Since 2013, it’s been owned by the fintech giant PayPal.

How does Venmo work?

As a peer-to-peer networking app designed for quick and easy financial transactions, payments between Venmo accounts transfer funds between digital wallets hosted on the platform. This is how Venmo works to enable instantaneous in-app money transfers — a big advantage over traditional bank-to-bank transfers, which can take hours or even days to process.

While mostly intended for transfers between friends, family, and other contacts, you can also use Venmo to make digital payments to authorized merchants. But there is a Venmo transaction fee for commercial payments. And if you make Venmo transfers using a credit card (rather than a debit card, or your existing Venmo account cash balance), a 3% surcharge is applied.

Venmo security: Is Venmo safe?

Generally speaking, Venmo is secure and safe to use thanks to bank-grade encryption safeguarding your account information and financial transactions. The security of Venmo payments is strengthened by features that restrict payments to personal contacts, along with a 24/7 customer service helpline offering support in the case of suspected fraud.

Venmo also allows people to add an extra level of security to their account by enabling two-factor authentication (a type of multi-factor authentication) and a PIN (personal identification number). But, like other accounts, Venmo wallets are still potentially vulnerable to hacking and password cracking.

Venmo offers multi-factor authentication for greater security.

And despite Venmo’s security protocols, there are still payment verification loopholes that scammers, fraudsters, and other crooks can take advantage of, so it’s not safe to make payments on Venmo to people you don’t know and trust.

What are the risks of using Venmo?

Although it’s considered a safe payment platform, Venmo privacy concerns have emerged around the ease of finding other Venmo users — even Joe Biden’s Venmo account was discoverable. Also, the platform’s default privacy setting is “public,” meaning users’ profiles, including their transaction histories, are visible.

Other Venmo security risks include:

To mitigate these Venmo risks, protect your account by creating a strong password, and changing your privacy settings to hide past transactions and keep future payments secure and private.

Does Venmo have buyer protection?

Although Venmo doesn’t offer comprehensive buyer protection, it does have a Purchase Protection Program for commercial transactions that meet certain criteria. Qualified payments include:

If items you paid for through Venmo aren’t delivered at all, arrive damaged, or are simply incorrect — and you qualify for Venmo fraud protection under the above terms — you’ll be reimbursed for the purchase, plus shipping costs.

But while Venmo does offer fraud protection under those limited circumstances, money sent via the app is not protected in most situations. That means a lot of loopholes remain open to abuse, leaving users vulnerable to Venmo scams.

Common Venmo scams to look out for

Venmo scams usually take advantage of social engineering techniques to lure people in with fake newsspam emails, or Venmo scam texts. The best way to avoid Venmo scams is to use Venmo only with trustworthy people you know.

So, is there a Venmo scam you need to watch out for, in particular? Unfortunately, there’s a whole bunch of them. Here are the most common Venmo scams to watch out for:

How to prevent Venmo scams

Despite the prevalence of Venmo scams, Venmo is safe to use as long as you take precautions to protect your money and account information. Here are healthy user habits and the basics of safer online shopping that will prevent you from being scammed on Venmo:

A good antivirus will scan for threats.

What to do when scammed on Venmo

If you’ve been scammed on Venmo, you should report the Venmo scam just as you’d report other internet scams. As well as helping to fix Venmo security issues, the following steps will help Venmo and other relevant authorities take action against the scammer:

Venmo alternatives

Here are some reliable alternatives to Venmo for peer-to-peer online payments, and how they work:

Browse securely and privately online

Conducting financial transactions online is never completely without risk. The best way to protect against theft, fraud, and privacy breaches is to be smart about how you access the internet, particularly when dealing with money transfers.

With an array of privacy tools — including an integrated VPN, powerful anti-tracking technology, and ad-blockers that can stop scam pop-ups — AVG Secure Browser helps you protect your financial data and keep all your browsing activity private. Get AVG Secure Browser today — completely free.