Money Transfer Apps: Pros and Cons

Money transfer apps are becoming more popular than ever. The ease of exchange is a huge draw.

Apps like Venmo, Apple Pay, and PayPal are even offering credit cards as their use continues to grow. Sound too good to be true? It might be. There are times where these apps are perfectly appropriate, but there are also times when their use is not a good idea.

PROS

  • Convenience
    Writing a check or taking a trip to the ATM are time consuming for those living in the 21st century. Opening up an app, selecting the recipient, and quickly typing in the amount of money you want to send is the type of convenience tech-savvy people are looking for.
  • Transaction History
    Can’t remember if you paid rent last week? Did you ever pay for your half of dinner? Transaction apps keep a history of the money you send a receive using their apps, so you can easily access your records when memory may fail.
  • Free
    For personal use, these apps are essentially free. Small fees may occur, such as instant transfers to your bank account, but for Venmo’s 40 million users, these fees are nominal.

CONS

  • Not for Business
    Venmo specifically has verbiage in their terms of service against using their app for business. These apps also do not sync with bookkeeping software, making it difficult to track billing.
  • Transfer Limits
    For security reasons, transfer apps usually have limits as to how much you can transfer. Be sure to check out what these limits are before you commit to using an app for a purchase.
  • Security
    While cybersecurity is more prevalent than ever, there is no way to 100% ensure that your account will not be compromised.

Convenience in financing and banking is becoming the norm, but we always advise our clients to be safe when it comes to their money exchanges. As technology develops, our phones are now also functioning as our wallets. Make sure that you protect your tech like you would your wallet or purse. Protection and privacy are still important in our digital world.