When I set up DS’s debit card with Wells Fargo, I specifically opted out of overdraft protection. If he has $7 in the account and wants to buy something for $8, the transaction is declined. But now he uses Venmo! And guess what – even if he has zero dollars in his account, he can Venmo a friend $10 and rack up a $35 overdraft fee!!! I had no idea these types of apps were treated differently from other purchases. So beware.
I think this is an issue you should take up with your bank. Venmo has no way of knowing the balance in the account. It simply submits the transaction. If you do not have overdraft on the account, then your bank should be rejecting the transaction. When that happens venmo will freeze your son’s account so he cannot use venmo until he makes good on the funds. I assume venmo shuts you down completely if this happens too often.
Oh I have – Wells Fargo said they’re treated differently. Same thing with any automatic payment like a health club. I guess I have to contact other banks and ask their policy.
Banks are just slimy, always trying to get over. I get the automatic withdrawals since they are a recurring payment but Venmo should be treated as a POS transaction and denied if insufficient funds.
Well, another reason I think I will stick with old fashioned checks but thanks for the heads-up. I did notify my D, who uses Venmo.
How about taking it up with the kid? Time to grow up and manage your money.
That’s why my venmo is hooked to my credit card, and not my bank account. I’m not always good about knowing what funds I have in what account.
@guineagirl96 – yourmama (above) would tell you to grow up! (kidding)
I did discuss it with my son. #1 it’s convenient and #2 there’s no way of knowing when the friends you’re paying back will “cash out” their Venmo. So yes in theory, he should make sure there’s enough cash in his account to cover all pending Venmo payments. I told him about the fees. He said he won’t use it anymore.
Good to know, thanks. I got Venmo because one of my kids’ friends used it to pay me back for a thing. I just deleted the app after reading this (and @guineagirl96 - apparently they charge 3% for CC transactions!). I’m deleting my account now too.
Googled a little and this suggests that a Venmo payment will not go through if there are insufficient funds in the account.
Might be a Wells Fargo thing.
“there’s no way of knowing when the friends you’re paying back will “cash out” their Venmo”
That’s not my understanding of how it works. If you send someone a venmo, the receiver doesn’t need to “cash out” for it to hit your account. It’s not like cashing a check. It’s more like a debit card transaction. It works like paypal does. Somebody can correct me if I am wrong.
Either way, good life lesson for your son to learn that he is responsible for keeping track of his balance, just like a checking account register.
It sounds like Venmo is more like a check than an instant dollar bill. Money goes into one’s Venmo account from where it can be cashed out. Here is a quote from Quora (I doubt I can post the link per our TOS):
“Transferring money from your Venmo balance to your bank account usually takes 1–2 business days but it varies depending on your bank. Usually if you have a major bank, your money is transferred into your account the next day. However, some smaller banks may take longer and it may happen faster on others.”
But that’s different than being pulled out by the other side like waiting for someone to cash a check. It seems more like processing time to me.
See if he has Zelle with his bank account. It is tied directly so he would not be able to transfer what he did not have, but he would have the same convenience.
Ah interesting! Thanks @Singersmom07
@OHMomof2 – that’s could be right – we’ve only ever used WF for the kids’ debit cards. Maybe I should do some research here.
WF does have a rep for getting every dollar they can…fraudulently if necessary!
Yes, Venmo takes the funds necessary for the transaction at the time you make a payment. When the person receiving the funds “cashes” out has nothing to do with when the funds are removed. I have used Venmo for a couple of years now to send money to my kids. In the case of my DD, she leaves the money in her Venmo account and uses it to “pay” other people, so the she actually “cashes” out in very small amounts over a long period of time.
I don’t know this for sure, but I assume this is one way Venmo generates revenue - they take money right away and then generate revenue off the holdings that are not immediately “cashed” out by the recipient.
The articles I linked above suggest not, because you can be scammed when their venmo fails to “clear” due to NSF?
Maybe it’s changed.
That’s within the window of the processing time.
Venmo is not a regulated lender/FDIC insured, so doesn’t have the protections banks have.
Also, you have to opt-in to overdraft protection, not opt-out. OP, make sure the account with Wells Fargo is set up correctly.