Posted on 10/18/2024 1:36:23 PM PDT by E. Pluribus Unum
NEW YORK — Connor Tomasko grew up wary of credit cards. As she taught herself more about managing money, she realized that many people also have bad habits when it comes to payment apps.
Tomasko, 31, a freelance software consultant in Chicago, understands why people appreciate the ease of the apps, which typically only require you to know someone's username in order to send money. But she realized that keeping money in the apps could be risky and means losing out on the interest from a high yield savings account. She now immediately transfers any payments out of the apps and encourages friends to do the same.
“I’m definitely the one that is always harping about high yield savings accounts,” Tomasko said. “But if you’re in an industry dealing with a lot of cash — bartending, say — sometimes you’re just worried about finding a place to deposit it. It’s not always a fun thing to talk about.”
As use of payment apps has grown in recent years, the Consumer Financial Protection Bureau has issued guidance on best practices to avoid pitfalls. For example, funds stored on Venmo or Cash App typically lack the deposit insurance you'd get from a bank, except in certain cases.
“Popular digital payment apps are increasingly used as substitutes for a traditional bank or credit union account, but lack the same protections to ensure that funds are safe,” CFPB Director Rohit Chopra said in a bulletin last year.
(Excerpt) Read more at time.com ...
Yep.
But also true is that the payment app company can go belly-up at any time and the money you had there is just gone.
Your account can also be cancelled for any reason and they will hold onto your funds.
Generally speaking, it’s not the apps that are weak. It’s the people using them. I used them when I ran a business. They provided customers a way to pay me with credit cards for small purchases.
I always needed the money so it was moved off pretty quickly.
99% of the problems with these services come from knuckleheads who get duped into sending money to fake accounts for non-existent products; or who grant access to their own account as a result of phishing attempts and out and out fraud.
These apps are tools. As with any tool, knowing how to use them and keep them “clean and sharp” is critical.
ITA! I never do any banking by phone or online. I don’t even like to go to the ATM. I prefer to go into the bank and deal with a teller.
I keep a few bucks in paypal, but not a lot.
Yeah, let’s say bartending.
PayPal was great for about a year after it started. Then it slowly turned into the schiff that it is today. Just because you’ve used iot without problems doesn’t mean millions of other haven’t. Stay away from all of them.
It’s payment app, not your bank mobile app. The function is to smooth out any transaction by fastly moving money between the payer and the payee. Not to store your wealth.
I signed up for Paypal 20 years ago, thinking I’d use it for ebay purchases; but I never used it.
I finally decided to just close the account, and it took forever to figure out a way to contact them and do that.
Finally I was able to close it and have an email from them proving that; but they won’t stop sending me emails. Sloppy outfit.
(I’ve found a lot of companies now make it very hard for you to actually talk to a human on the phone.)
I’m using the McDonald’s app and for some rewards you have to have something for electronic pay
I keep 2 accounts with VERY little money
I might move $10 into Venmo to use on McDonald’s - there would be virtually nothing behind it in the bank account (1 of the 2)
Agreed.
We can jump in the car even though we really have nowhere to go, but we are too lazy to jump in the car to go to the bank...
I have used Paypal, Venmo, and Cashapp only to move money to/from someone. Once I have received funds, I take them out ASAP. I do not use them like bank accounts.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.