Why Does Venmo Need My SSN? Is That Safe?

As a fellow tech geek, I totally get the hesitation around handing over your social security number (SSN) to any app or website. Your SSN is incredibly sensitive personal information that unfortunately can be used for identity theft and fraud if it falls into the wrong hands.

So why does a popular payment app like Venmo require your SSN when all you want to do is send some money to your buddy for last night‘s dinner? Excellent question!

In short, Venmo needs your SSN for identity verification and tax reporting purposes to comply with anti-money laundering regulations. And despite some risks, they actually take extensive security measures to encrypt and protect your private data.

But I‘ll dive into the specifics in more detail below, along with some pro tips for keeping your SSN secure when using fintech apps like Venmo. Let‘s get to it!

Why Does Venmo Require Your SSN Anyway?

As a digital peer-to-peer payment network, Venmo provides a convenient way for friends and family to transfer money, split expenses, and make purchases.

However, since real funds are exchanging hands, Venmo must comply with financial industry regulations just like traditional banks and financial institutions.

Here are the two primary reasons why they need your personal SSN:

Identity Verification

Venmo is legally obligated to verify user identities under Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.

These laws require financial institutions to validate customer identities using documents like an SSN to prevent criminal abuse of their systems for illegal money transfers or terrorist financing.

Your SSN allows Venmo to crosscheck your identity against public records to confirm you are who you claim to be.
This prevents bad actors from opening accounts using fake or stolen identities to perpetrate fraud and other crimes.

According to Venmo‘s terms, "We may require you to provide additional information to help verify your identity or otherwise confirm information about you in order to allow you to access and use the Venmo Services.”

Tax Reporting

In addition, Venmo must issue IRS Form 1099-K to users who exceed $600 in business-related payments received within a calendar year.

To properly associate these transactions with your tax identity, Venmo needs your SSN or Employer ID Number (EIN) on file.

This allows them to send your total payments received to the IRS and helps prevent tax issues or penalties down the road.
Again, your SSN serves as the unique identifier that links your Venmo account holder activity to you as an individual.

So in summary, Venmo requires your social security number to:

Verify you are a real person and not a potential fraudster
Accurately report transactions for tax purposes

Both reasons simply ensure legal and regulatory compliance as a licensed money transmitter in the US.

Is It Safe to Trust Venmo with My SSN?

Given the regular headlines about major companies getting hacked, it‘s perfectly reasonable to worry about the security of handing over your SSN to an app like Venmo.

Once your SSN is compromised, it can be incredibly difficult to undo the identity theft and financial fraud that can ensue.

However, Venmo and parent company PayPal invest heavily in data security and encrypting sensitive user information. Here are some key measures they take:

User SSNs are encrypted and only stored on proprietary secure servers, not on user devices.
Venmo undergoes regular security audits and penetration testing to identify and address vulnerabilities.
Employees must pass background checks and follow strict data access protocols to view private user data.
Venmo accounts require two-factor authentication at signup and for all logins via SMS or authentication apps.
Venmo uses AI technology to detect account anomalies and potential fraud in real time and blocks suspicious activity.
Users must consent to Venmo’s Terms of Service which allows legal action for unauthorized data misuse.

You can also take steps to keep your SSN secure when using Venmo:

Use a unique password – Don‘t reuse passwords across accounts and use a combination of letters, numbers and symbols that would be difficult for hackers to guess. Enable two-factor authentication as well.
Think twice before sharing SSN – Only enter your SSN when required for identity verification. Don‘t share it with others or post it publicly.
Monitor account activity – Periodically review your transaction history and watch for any unauthorized payments or transfers.
Update info if compromised – If you believe your SSN was compromised elsewhere, update your info with Venmo support right away.

No system is ever 100% bulletproof. But Venmo exceeds industry standards for data encryption and security based on their track record and ownership by PayPal.

What Are Your Options If You Don‘t Want to Provide Your SSN?

Realistically, you need to provide your SSN if you want to use Venmo without major limitations. The SSN requirement is hardcoded into their regulatory compliance procedures.

However, if you are truly uncomfortable handing over your SSN, you do have some alternatives:

Cash App – Owned by Square, also requires SSN but is growing in popularity
Zelle – Allows transfers between bank accounts without requiring SSN
PayPal – Venmo‘s parent company but offers more anonymity
Traditional Bank Payments – Bank wires or checks don‘t require SSN sharing

Just know that most digital payment apps and financial accounts will likely prompt you for your SSN at some point as well for identity verification and tax purposes.

Some other options to consider:

Gift cards – For friends you trust, purchase gift cards to exchange instead of direct payments
Cash – For local payments, good old cash doesn‘t depend on your SSN
Cryptocurrency – More complex but transactions are pseudoanonymous without SSN

Unless you avoid regulated financial institutions altogether, you‘ll have a hard time finding a payments platform that guarantees they will never request your SSN.

Step-by-Step Guide to Providing Your SSN Safely

If you decide to proceed providing your SSN to Venmo, here are some tips to maximize safety:

Only Enter SSN In Official Venmo Mobile App

Never send your SSN via email, text message, social media, or any other channel.
Anyone asking for your SSN outside the Venmo app interface may be attempting to phish your data!

Use Strong Password & Enable Two-Factor Authentication

A weak reused password makes your Venmo account an easy hacker target.
Create a long randomized password using a combination of upper/lower case letters, numbers, and symbols.
Enable two-factor authentication which requires entering a code from your mobile phone when logging in.
This prevents a criminal from accessing your account even if they have the password.

Review Venmo Privacy Settings

Adjust your privacy settings based on your comfort level.
Venmo defaults to a social model letting friends see your profile, friends list, comments and payments.
But you can limit sharing so only the parties involved see transaction details.

Provide SSN Only on Trusted Private Networks

Never enter your SSN on public WiFi networks which have no encryption.
Criminals can intercept data sent over public hotspots using spoofing techniques.
Only provide your SSN when connected to a password-protected home or work WiFi.

Monitor Account Activity & Report Issues Promptly

Routinely check your transaction history and watch for any unauthorized payments.
If you spot suspicious activity or transfers, immediately contact Venmo support.
Acting quickly can help limit damages and allow Venmo to secure your account.

By taking these precautions, you can maximize safety when handing over your SSN to Venmo. It may still feel a bit uneasy, but weigh the convenience Venmo provides against the small security risks involved.

Let‘s review answers to some frequently asked questions about Venmo requiring your SSN:

Can I use Venmo without providing my SSN?

Unfortunately no. To maintain full functionality, Venmo requires your SSN primarily for identity verification purposes. Without providing it, your Venmo access will be extremely limited.

What if I don‘t have a social security number?

Those without an SSN, such as certain non-US citizens, currently cannot use Venmo‘s services. Venmo does plan to support alternate forms of ID verification in the future.

Can I just make up a fake SSN to use on Venmo?

Absolutely not! Providing false personal information is grounds for Venmo to immediately ban your account. Only use your legitimate assigned SSN.

What if I‘m just not comfortable giving Venmo my real SSN?

If you strongly object to providing your actual SSN, Venmo may not be the right platform for you. Consider alternatives like Cash App, Zelle, PayPal or traditional bank transfers instead.

If my SSN changes later, how do I update it on Venmo?

If you receive a new SSN from the Social Security Administration, contact Venmo support to update it to avoid any account access or tax issues.

Can I delete my SSN from Venmo after submitting it?

Unfortunately no – there is no way to permanently remove or delete your SSN from Venmo‘s encrypted systems after providing it initially.

Could I get in legal trouble for making up an SSN on Venmo?

Possibly yes. Providing falsified credentials could potentially expose you to identity fraud charges depending on the situation. Only use your real assigned SSN.

While handing over your SSN brings some risks, Venmo secures your private data and protects against account misuse according to strict regulations. As long as you take precautions, using Venmo shouldn‘t pose substantial threats to your identity or security.

The Bottom Line

I hope this transparent overview helps explain why Venmo needs your social security number and how they keep it safe! While you shouldn‘t treat it lightly, providing your SSN is required to unlock the full peer-to-peer payment functionality Venmo offers.

My advice is to weigh those benefits against the small security risks, and take steps to protect your personal data. As long as you use a unique password, enable two-factor authentication, monitor your account, and update your SSN if it ever changes, you can feel confident using Venmo for convenient payments with friends.

Let me know if you have any other questions! I‘m always happy to chat more about maximizing fintech and social media safety.