The FDIC 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 those payment apps, those funds may not be protected.
NEW YORK — Customers of Venmo, PayPal and CashApp should not store their money with those apps for the long term because the funds might not be safe during a crisis, the Consumer Financial Protection Bureau warned Thursday.
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 those 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.
that is operated by Goldman Sachs. The savings account took in billions of dollars in deposits within days of its launch.
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Read more »
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Read more »