Conversation Starter: Enter the Digital Wallet Era

Digital payment methods are growing in popularity and Venmo is one of the most popular. It allows you to transfer money digitally to another individual or even to shop in some cases. You download the free app to your smart phone, link a bank account, add an avatar, create a username, and you’re good to go! Person-to-person transfers are free of charge; the recipient pays a small fee for commercial transactions.

Here are some things to know about this app-based digital wallet.

Digital payments provide some benefits.
When it comes to traditional cash or check transactions, your spending is no longer limited to having cash in your pocket or access to your checkbook with a digital wallet. With your phone in hand, you can transfer money anytime and anywhere. For example, you can join the office lunch order even though don’t have your wallet on hand. You can immediately pay back your friend who picked up Fifi from the groomer for you. You can probably even stop for that glass of lemonade and support local young entrepreneurs. Digital payments allow for spontaneity.

Speaking of that lemonade stand—if you have young people in your life, they’re probably using a digital wallet on a near-daily basis. With the avatar and emojis, Venmo provides an alluring social-media-type experience. You can send your favorite college student $25 and include a pizza emoji with a short message. Or send a little pocket money and a star emoji to celebrate a long-distance niece’s successful audition for the school play. When you use your digital wallet for a gen Z, you’re communicating in their language. Your digital wallet allows for connectivity.

Digital payment options offer a real-time way to communicate and send money. It’s a convenience that is becoming indispensable to our society that is moving further away from cold, hard cash. Digital payment options provide an easy way to access and transfer money.

Important things to realize about digital payments.
Digital transfers require both people to be users, so both you and your recipient must be comfortable with the technology required. In other words, while most everyone can receive cash and checks, not everyone can receive a digital transfer. In this way, digital transfers are limited.

Mis-sending money is a potential downside. If you Venmo money to the wrong person, your only recourse is to ask for it back—the choice is up to the unintended recipient. There are a couple workarounds to prevent this unfortunate circumstance. There’s usually a prompt for a first-time transfer that asks you to confirm the recipient’s phone number. If you don’t know it or you just want to be extra careful, you can transfer a small amount first to confirm it’s going to the right person. The good news is that once you’ve made a transfer, that recipient’s information becomes part of your contact list for future reference.

Your recipient gets an immediate notification that they’ve received a transfer. But the actual transfer of money is not necessarily immediate. The waiting time to receive the money can be one to three days unless the recipient pays a small fee for an immediate transfer into their bank account. In other words, a transfer is free but an immediate transfer is not.

Bear in mind that a digital transfer is definitely a less personal way to interact. It can be a great option to reimburse someone or to surprise someone with an impromptu gift. But sometimes, nothing compares to a handwritten card with a check or cash inside.

Finally, like anything digital, once you release something to the internet, you’ve given up some amount of control and are relying on someone else’s cybersecurity practices. Venmo’s allure to younger generations includes the social aspect—there’s a social feed that will display transactions unless you set your account to PRIVATE. You must review and set your privacy settings so that you’re comfortable with the transaction information displayed.

In summary, using a digital wallet can be convenient and—with its emojis and avatars—can even be fun. Maybe it’s something you’d like to try or maybe not. But now you’re familiar with a very new verb in our language: Venmo-ing.

We take pride in providing services in a way that our clients can easily understand, whether we’re blogging about an interesting trend or working with you to create your estate plan. If you’d like to work with us, contact us today at (941) 914-9145.