Here’s whether it’s safe to use Venmo for Craigslist:
Using Venmo for financial exchanges via Craigslist comes with inherent risks that are not addressed by the app’s design.
While Venmo does offer good security for users, there are scams and exploits that are more common on a site like Craigslist.
Venmo suggests that you don’t use the app in this way.
So if you want to learn all about how safe it is to use Venmo for Craigslist exactly, then you’re in the right place.
What Is Venmo?
Before we can really get into the safety aspects of Venmo, it will probably help to demystify the service.
So, Venmo does exist as an app on mobile devices, but at its root, it’s really an electronic service.
You probably already understand that Venmo helps people send or receive money digitally, but there’s a little more to the app.
Specifically, it is designed as a means to transfer funds between people who already know each other.
It is not designed as a service for anonymous funding and transfers.
As we get into some of the specifics of how Venmo works, you’ll see why that matters.
What separates Venmo from other money transfer services is that it takes after social media services in a few ways.
It’s easier to communicate via Venmo than most other comparable services, and the idea is that it creates an easier, friendlier atmosphere.
How Does Venmo Work?
In essence, Venmo allows users to transfer money by linking with bank accounts or financial cards.
You can link a credit or debit card to Venmo, and you can put money into your Venmo accounts specifically.
A couple of examples make this easier to understand.
Let’s say you and a friend go out to lunch. They pick up the tab, so you send them money to cover your half.
If you have no balance in your Venmo account, you can still send them money.
The process will take the money from the card you have connected to Venmo, and everything works easily.
But, you can also have a Venmo balance.
Let’s say last week you and your friend had a similar lunch, but they transferred you money.
When that money hits your Venmo account, you can transfer it to the card or bank account on file.
Or, you can leave it in your Venmo balance.
You can also transfer money into the Venmo balance.
In that case, if you send money to another user, it will subtract from the Venmo balance first.
If that’s not enough to cover the whole payment, then any needed funds will come from the card on file.
So, Venmo can just be a mechanism for sending and receiving money, or you can leave money in the account and use it as an additional financial account of sorts.
It’s up to you how you want to use it.
Outside of accounts, Venmo requires that you communicate with other users to send or receive money. That requires adding contacts on the account or using a QR code. You’re about to see how both methods work.
How Do You Find People on Venmo?
By and large, people use Venmo with people they know.
In the example we used before, you were sending money to a friend you just had lunch with. So, you already know this person.
That’s why phone contacts are one of the easiest ways to connect with people on Venmo.
The app (if you give it permission) can go through all of your contacts saved on the phone and automatically add people to your Venmo account for you.
Another way to add people on Venmo is via social media.
As an example, Venmo can scroll through your Facebook friends list and add any of them to your Venmo contacts.
From there, you can send and receive money as you see fit.
In these regards, Venmo behaves a lot like social media apps. If you’ve ever let an app automatically find “friends” for you, it’s basically the same process with Venmo.
What Is an QR Code and What Is the Connection to Venmo?
Sometimes, you might want to use Venmo to send or receive money involving someone you don’t know so well.
You might not want to give them direct contact information, so you need another mechanism (this is common with registered businesses that accept Venmo payments).
In this case, you can use a QR code. This is a special digital code that serves as the contact information for the app.
Only the Venmo app can read the code.
So, if you give someone your Venmo QR code, they can interact with you, but they don’t get any real-life contact information along with it.
It’s important to understand that this process still involves your Venmo profile.
So, any information that is publicly visible on that profile is visible to someone using your QR code.
But, since you can control what is on your Venmo profile, you can make sure strangers don’t see too much information.
All of that said, Venmo states that the app is not really intended for use with strangers (we’ll go over them in detail in a bit). There are risks associated with that, so the QR code only does so much to protect you.
How Does Venmo Provide Security? (3 Ways)
Venmo is a pretty big name in terms of payment apps.
Surely, they offer some good security measures, right? They do.
Venmo is as secure as any other payment app, and that security can be viewed through three important lenses: encryption, anonymization, and authentication.
The most important security feature provided by Venmo is data encryption.
Like any bank or financial service, Venmo encrypts all transactions. This prevents third parties from being able to view the transactions or financial information.
It’s a vital step that protects users from having financial info or their identities stolen.
Venmo does not automatically anonymize you as a user, but it does provide that option.
You can create a business name or change your profile name as you see fit.
The same goes for contact information that is available to other users.
While Venmo needs to know your legal name and good contact information (like a phone number and email address), it does not have to share those details with other users.
So, if you’re worried about your personal information, you can hide it from other users on the app. That adds a layer of security for anyone concerned with identity theft and similar risks.
Arguably the greatest vulnerability tied to Venmo is your own account. If someone can access your account, they can use it to steal money from you.
So, in order to protect your account, Venmo uses standard authentication practices. This is why you need a username and password to sign in.
You can expand on this with 2-factor authentication. With this, you set a device (usually your smartphone) as the default safe device.
In order to log into Venmo, you have to provide the username and the password.
You then also have to provide a code that is sent directly to your phone.
So, someone trying to access your account would need to know the username and password while also having direct access to your phone. That’s a lot harder to do.
If people can’t access your account, they can’t steal from it. That’s why authentication security is so important.
What Is Craigslist?
Chances are that you are familiar with Craigslist, but here’s an overview for anyone who hasn’t used the site before.
Craigslist is an online directory where people can post something they need to sell or acquire.
It’s basically a website that looks like a bulletin board full of personal fliers you might see on a college campus.
People can find complete strangers on Craigslist in order to communicate, sell things, buy things, or do just about anything else imaginable.
The big draw of Craigslist is that it isn’t heavily policed (as far as websites go), so you have a lot of freedom in how you use it.
What Are Security Concerns With Craigslist in Combination with Venmo? (3 Points)
Because Craigslist isn’t carefully curated, there’s a lot of room for bad actors to do bad things.
For the most part, there are two risks when you use Craigslist.
You can fall for a scam, or someone can try to steal your identity.
Theoretically, other risks could exist, but these are the two in focus today.
We’ve already gone over how Venmo largely protects your identity.
So, let’s greek down the primary scams you might see on Craigslist (at least the ones that could involve Venmo).
#1 No Delivery
As a buyer, this is the biggest risk.
You can connect with someone on Craigslist and offer to buy an item from them.
You send the payment via Venmo, and then they never send the item.
Venmo doesn’t offer much in the way of purchase protection and recovery, so you’re pretty much out of luck on this one.
This is the primary reason that Venmo doesn’t endorse this type of use of its app.
You’re not really protected in this case. But, if you want to take that chance, the app will function in this regard.
#2 Disputed Charges
This is a reverse of the other scam.
In this case, you are the seller.
You sell the item via Craigslist. They pay you via Venmo, and then you send the item. Everything was great.
Until they dispute the charge, that is. There are two ways this can happen.
They can open the dispute with Venmo, or they can open it with the card that was charged.
In either case, you, as the seller, will be in direct contact with Venmo or the card company.
If you can provide proof that you did in fact deliver the item, there’s a good chance you will win the dispute.
But, there are no guarantees that things will go in your favor.
If Venmo or the card issuer sides against you, they will take back the payment.
In that case, you’re out the item you sent, and you get no money for it.
#3 Stolen Cards
This is probably a bigger risk when you sell things on Craigslist.
If the buyer is using a stolen card, then things can get pretty complicated.
Look at it from the point of view of the person whose card was stolen.
You’re going through your statement, and you see this random charge that clearly wasn’t legitimate.
You contact your credit card company and let them know. They look into it and see that someone stole your card (or card information) and made a purchase with it.
They then refund you, freeze that card, and issue you a new card so the problem doesn’t repeat.
That happens to a lot of people.
But, how does it look from the seller’s point of view?
In this case, you sold an item on Craigslist and they paid you with Venmo. It turns out that they were using a stolen card with Venmo.
So, when the credit card company looks into it, they see an illegitimate charge, and they force a refund.
Venmo will play ball with the credit card company here.
So, they will automatically refund what you were paid for the item.
Even though you didn’t do anything wrong, you’re out the money you are owed, and odds are, you already gave up the item.
This is another reason why using Venmo on Craigslist (or similar sites) is inherently risky.