Today’s technology allows for instant cash access, whether you need to send money or receive money. It’s what’s called peer-to-peer payments, or P2P. P2P is a way to transfer funds from one bank account to another via a digital medium. What consumers may not know is, however, that the money they are sending and receiving may not be fully insured, depending which platform they use.
https://news.slashdot.org/story/23/06/04/2350229/us-financial-watchdog-money-stored-in-venmopaypalcashapp-isnt-federally-insured
Many people now days transfer, pay, and accept money through various digital means. Gone are the days of writing someone a check, having to wait for it to be deposited, clearing the bank and then you have your money. Today’s technology allows for instant cash access, whether you need to send money or receive money. It’s what’s called peer-to-peer payments, or P2P. P2P is a way to transfer funds from one bank account to another via a digital medium. What consumers may not know is, however, that the money they are sending and receiving may not be fully insured, depending which platform they use. Let’s look at a few popular ways to send and receive money, what they have in common, and which way might be the best overall.
CASHAPP
CashApp allows you to send and receive cash using a bank account, debit card or credit card without a fee. You can also have a Cash Card, which is a Visa debit card that you can use anywhere Visa is accepted. You are also able to purchase stocks and Bitcoin with CashApp; and even prepare your taxes, also free. If you want to cash out instantly, there is a 1.75% fee, or you can wait a few days and be charged no fee. If you send money using a credit card, there is a 3% fee.
VENMO
Venmo is very popular on social media platforms. Venmo is used to share payments with your friends, even allowing you to add what the payment is for and emojis. As with CashApp, you can send and receive money for free, or if you want it instantly, there is a 1.75% fee to transfer the funds. You can also send money using a credit card with a 3% fee. Venmo has high sending limits, which means you can send up to $60,000 a week after you verify your identity.
PAYPAL
PayPal has been around for a long time and is probably the most recognized. Like Venmo, PayPal lets you send large amounts of money in a single transaction. You can also withdraw money for free, but like the others, charge a fee of 1.75% if you want your money instantly. You can also buy crypto through PayPal, but not stocks or other investments like you can with CashApp.
APPLE CASH
Apple cash is stored digitally in your wallet on your phone. You can receive and send money through Messages or through your wallet. The money is there whenever you need it, and you can use it in stores, through apps, online and works where Apple Pay is accepted. You can also transfer Apple Cash to your bank account.
ZELLE
Zelle is offered through banks and credit unions. Over 1,700 institutions use the Zelle platform. Zelle doesn’t charge any fees to send or receive money and the money goes directly into your bank account. The downside with Zelle is that you can only link to one bank account at a time to send and receive money through.
While all the above-mentioned peer-to-peer platforms are convenient to use, the only one that is FDIC insured up to $250,000 is Zelle. And that is because money received and sent through Zelle goes directly between FDIC insured bank accounts. Venmo, CashApp and Apple Cash are not held in FDIC insured banks and customers’ money is not protected, and the customer may end up losing whatever amount of money was held on a particular platform. The Financial Technology Association assures consumers that accounts like Venmo, CashApp and Apple Cash are safe, transparent, and insured. In the long run, though, it would be well worth it to stick with a platform that guarantees stability and insurability. We’ve all seen recently how quickly some banks can fall when consumers withdraw a large amount of funds in a short amount of time.
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