If you haven't deposited that leftover money sitting in your Venmo, PayPal and CashApp and into your bank, you might want to start.
The Federal Deposit Insurance Corporation insures bank accounts up to $250,000. But money stored in Venmo or CashApp or Apple Cash is not being held in a traditional bank account. So, if there is an event similar to a bank run with these payment apps, those funds may not be protected.
“We find that stored funds can be at risk of loss in the event of financial distress or failure of the entity operating the nonbank payment platform, and often are not placed in an account at a bank or credit union and lack individual deposit insurance coverage,” the CFPB said“Consumers may not fully appreciate when, or under what conditions, they would be protected by deposit insurance,” the agency added in its report.
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Money stored in Venmo, other payment apps could be vulnerable, financial watchdog warnsCustomers of Venmo, PayPal and CashApp should not store their money for the long term with these apps since their funds may not be covered by deposit insurance, the Consumer Financial Protection Bureau warned on Thursday.
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