How Your Credit Union Can Address Non-Bank Payment App Risks

Non-bank payment apps like Venmo, Zelle, and Square are increasingly popular among Millennials and younger members. These apps offer the convenience of transferring money with just a few clicks, making it easy to split bills, pay for pizza, or repay friends without leaving the couch. However, this convenience comes with security concerns.

Understanding the Risks

While apps like Venmo offer a social and interactive experience—such as sending money with a note or emoji—they also require users to set up an account and manage funds within the app. Venmo even provides a physical debit card for transactions, supported by MasterCard and featuring chip technology and contactless payments.

Despite these features, security risks persist. Venmo uses data encryption and offers PIN/password protection, but vulnerabilities still exist. For instance, text message notifications could potentially be exploited by hackers.

Keep Reading: Zelle, Venmo, and FedNow: Pros and Cons of Each Payment Method

What Credit Unions Can Do

Credit unions play a crucial role in educating members about the risks of using non-bank payment apps and providing safer alternatives. Here’s how:

Educate Members on Security

• Advise members to avoid storing large amounts of money in their Venmo balance. Encourage them to transfer funds to their bank account regularly.
• Recommend only using Venmo to exchange money with known contacts and to opt out of the app’s social network by setting their transactions to "private."
• Suggest enabling notifications (Push, Text, Email) to monitor account activity and to set up additional security measures like a PIN and Touch ID.

Highlight Your Credit Union's Card Services

• Remind members of the benefits of using credit union cards, which often offer superior security features and insured funds.
• Promote services like remote control cards and other features that enhance security and convenience.

Train Your Staff

• Ensure staff are knowledgeable about the security features of your credit union’s cards and can effectively communicate these benefits to members.

Providing Valuable Guidance

Members may turn to you for advice if they experience security issues with non-bank payment apps. Offering clear guidance on how to manage these risks and highlighting the advantages of your credit union’s services can help them make informed decisions.
For further assistance and to learn more about our secure card services, click here.