Released: June 13, 2023

The risks of storing money in apps like Venmo, Cash App

Source: Ann Carrns, N.Y.Times (Paid Registration)

Millions of Americans use mobile payment apps to pay friends, family and retailers, but they may not know that money held in the apps often lacks federal insurance protection. Unlike deposits in savings and checking accounts at federally insured banks, funds stored in many “peer to peer” apps aren’t automatically protected.

The apps do team up with F.D.I.C.-insured banks to offer accounts with “pass through” F.D.I.C. insurance protection. But users may have to take extra steps or sign up for certain services to activate the coverage, the bureau found.

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