Say goodbye to the days of hand written “I-O-U’s” as you can now say, “Venmo me” and the transaction is complete. This iPhone app, along with several others offer an easy payment-exchange. You simply punch in the debit-card number and typed in a quick message like “To Joe, $40 for dinner last night” and then hit send. The process is simple and fast, ripping up old I-O-U’s and paying you on demand.
According to Wall Street Journal, Venmo is one of many apps aiming to make it easier to instantly pay or get paid by friends. It is quickly becoming a verb among the younger set, mostly because of its social features. Yes, even our private financial transactions are going the way of Instagram with likes and comments. Venmo can be surprisingly fun and convenient, though after testing the apps, however Square Cash to be faster and easier to use.
Venmo Drew Evans/The Wall Street Journal
The four apps tested by Wall Street Journalist were—Venmo, Google Wallet, PayPal, Square Cash—which all work similarly. You put in your bank-account or debit-card information and then you can pay people or they can pay you. While you need one of those to receive money, Venmo, Google Wallet and PayPal also let you use credit cards to pay someone, for a 2.9% fee. PayPal and Google Wallet charge that same fee for debit-card use, too, while Venmo and Square Cash let you use debit cards without a fee. Sending money from a bank account is always free, but my pick, Square Cash, doesn’t offer it.
The differences between the services become apparent once you start spending. Venmo, which is owned by Braintree, a PayPal unit, is all about turning your transactions into public status updates. If you grant it permission, the app will use your phone’s address book or Facebook account to find friends on the service. But sending money or requesting money from a friend is only part of it.
As soon as you open the app, there is a Facebook-like newsfeed of your friends’ transactions—hotel rooms, Indian food and cab rides are just a few things my friends seem to be paying for with Venmo. You can then comment or “like” the update.
Fortunately, the amount you paid isn’t public and you can disable the sharing features on each transaction. Some users initial reaction to seeing that Courtney paid Mary “for green juice” was something along the lines of “Get off my lawn, you dang kids!” But the Wall Street journalist’s pessimism soon dwindled, and he started to see the fun in it. Funny messages for paybacks and comments to each other made it more fun to receive money.
Square Cash makes it even easier to manage splitting those big payments, though, with a handy dashboard. The biggest benefit: The service doesn’t require the people who are paying you back to sign up for an account.
PayPal Drew Evans/The Wall Street Journal
Within the Android or iPhone app, you punch in the requested amount of money and your friend’s email address, then hit send. They will get an email with a link to a secure site that prompts them to put in their debit-card information. Both parties are notified over email instantly and then the money will be deposited in your debit account.
Google Wallet offers a similar feature that allows you to email money, though you must do it from a Gmail account, and setting up an account requires more effort than Square Cash and Venmo, including entering your home address and the last four digits of your Social Security number. And since Google charges 2.9% for debit cards, you’re better off putting in those never-handy bank account and routing numbers.
PayPal is the most established player and you may well already have an account. But just like Google, the only way to avoid fees is to use a bank account. That said, PayPal offers international transfers and transactions of up to $10,000 in the U.S., unlike some others.
When it comes to the safety and privacy of turning your phone into a wallet, you might understandably be worried, given the recent security scares, including the Target breach and the Heartbleed bug. Here’s what we know: All four companies comply with the Payment Card Industry Data Security Standard (PCI DSS), which was created by a coalition that includes Visa, MasterCard and American Express to provide multiple layers of protection for digital financial transactions.
All of the companies also have 24-hour fraud-and-risk-protection teams, and Venmo, Google Wallet and PayPal let you PIN-protect the app, in case your phone is stolen. Square Cash doesn’t have a PIN, but it prompts you for your credit card’s security code before you can send money.
There’s certainly no sort of protection like that on your checkbook, which could soon be replaced by Square Cash the next time you need to pay back a friend. While Venmo is a convenient (and surprisingly fun) option if your friends are on it, Square Cash is the better way to settle up with people who aren’t on any service. Still, “Square Cash me” doesn’t quite have the same ring.
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