These days it seems like fewer and fewer people are carrying cash. Especially as students, it’s a lot more convenient to carry around a debit card and/or credit cards on a daily basis, rather than to have to lug around a large amount of paper money or coins. But as many of us know, this can lead to complications when you are splitting a pizza deal with a couple friends, or trying to four-way spilt utilities with your roommates. And since checks can be expensive and ATM fees can add up, we need an easier solution.
Apps like Venmo, Square Cash and Google Wallet offer that solution. All you need to do is download the app from the app store, sign up, and register a checking account or debit card. Boom. You can instantly transfer money to anyone at anytime, using a unique username and password. Did I mention that it was free? And, whoever receives the transfer can “cash out” whenever is convenient, and it processes almost instantaneously!
Sounding too good to be true? Yes, these types of applications have their downfalls. Here are some things to look out for when using cash transfer applications:
- Lack in Customer Service: many online reviews state that these companies are lacking when it comes to customer service. Their account stops working and it takes longer than it should to get ahold of a customer service rep to finally get their account back up and running. In addition, many of these companies offer little-to-no live support.
- Security Problems: it seems that there have been no big issues with fraudulent behavior or hacking with these types of apps. However, it is important to be cautious when using them because many offer no extra security measures (you only have to login to the app once to transfer out money). I’m not sure if I would trust one password on a mobile device to protect my entire checking account!
- Need for Checking Account: another downfall is that some of the apps require a checking account or debit card for the free transfers. They will often tack on a small fee when transferring from a credit card. However, with their business models, if you do have a checking account/debit card, it is hard for them to have hidden fees.
So whether or not you decide to join the cash transfer application community, remember, as in any decision with finances, it is important to weigh the pros and cons. Yes, it will add convenience for the college lifestyle – but at what costs?
Peer Counselor II
Powercat Financial Counseling