I had $50 in venmo, which I used to purchase groceries, because my bank account is currently negative.
Instead of using the $50 in my bank account, instead, a week later the $50 came out of my bank account, not touching the Venmo balance at all.
So now I have an overdraft fee, effectively meaning I paid 1.5 times for those groceries.
I don’t have “overdraft protection,” I’ve told my bank I don’t want overdrafts to go through, but fuck me for being poor I guess.
A neighbor pointed out to me that Venmo, Paypal, and other such services lack the consumer protections of a credit card. So, I don’t use them. If I have a problem with a purchase, I know my credit card vendor will contact the merchant and deal with it. Even if the vendor says “All sales are final”, I’ll get a refund when I challenge the sale.
Yep, they are explicitly not banks or traditional financial institutions and therefore have none of the standard protections. They don’t only lack the protections of credit cards, but also of banks in general.
There are countless stories of people losing access to over $10k in their PayPal account with no option to appeal because PayPal decided their Twitch revenue looked too much like money laundering. Or because a single transaction involved a card later reported stolen. Or… just because. Some people aren’t even given a reason.
Yeah, I prefer not using venmo, but I had negative money in my bank and some Venmo money my boss had sent me. I wanted groceries and that was the only money I had “access” to.
I was going to recommend never keeping a balance in Venmo or the like, but understand sometimes waiting a few days for it to transfer to your bank can make things difficult.
Transfers are usually pretty quick these days. Sometimes I transfer money from Schwab to Fidelity at night, and it’s already available the next morning.
In the USA, a lot of the larger banks and brokerages (and maybe credit unions?) internally use systems like FedNow or RTP, which allow for instant transfers to other banks. It can take a little while if they do extra security checks though.
I had a credit card company say a payment in the wrong amount was not something they would help with so its limited.