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Is anyone here familiar with it? It has spread like wildfire here at CMU and it strikes me as very fishy. I refuse to use it.
Here's how it works: You give Venmo your bank information. It can then withdraw from your account and in return gives you a sort of scrip, kind of like Microsoft Points back when they had that for xbox live. You can add friends on Venmo if they have a Venmo account. You can then send them money by transferring scrip from your account to theirs. The notion is that you use this to do things like split a bill at a restaurant or pay them back for gas after a road trip or similar things that I would honestly just use cash for. When it's time to actually get some US dollars back, you use the "cash out" button and it deposits the scrip in your bank account.
None of my friends seem to realize what this means. You're giving this random startup (admittedly owned by PayPal) an interest-free loan without any bank guarantees at all, no regulation on depositor reserves or anything. It's a substantial financial risk. Plus the opportunity for fraud is tremendous, if you accept a friend request from someone who isn't actually your friend, just a faker, you might end up giving money to a fraudulent stranger.
Has anyone here used this service? What do you think of it? I know I have a reputation on this site for being anti-regulation. I think probably 99% of government regulations, even (especially?) those concerning banks could and ought to be done away with. But this strikes me as an unexploded land mine if not a ticking time bomb...
Here's how it works: You give Venmo your bank information. It can then withdraw from your account and in return gives you a sort of scrip, kind of like Microsoft Points back when they had that for xbox live. You can add friends on Venmo if they have a Venmo account. You can then send them money by transferring scrip from your account to theirs. The notion is that you use this to do things like split a bill at a restaurant or pay them back for gas after a road trip or similar things that I would honestly just use cash for. When it's time to actually get some US dollars back, you use the "cash out" button and it deposits the scrip in your bank account.
None of my friends seem to realize what this means. You're giving this random startup (admittedly owned by PayPal) an interest-free loan without any bank guarantees at all, no regulation on depositor reserves or anything. It's a substantial financial risk. Plus the opportunity for fraud is tremendous, if you accept a friend request from someone who isn't actually your friend, just a faker, you might end up giving money to a fraudulent stranger.
Has anyone here used this service? What do you think of it? I know I have a reputation on this site for being anti-regulation. I think probably 99% of government regulations, even (especially?) those concerning banks could and ought to be done away with. But this strikes me as an unexploded land mine if not a ticking time bomb...
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