Payment Methods

Venmo, Square Cash Vie For Stimulus Funds Distribution

Venmo and Cash App want to be considered as ways the U.S. government could deliver its stimulus funds to help the coronavirus-wrecked economy.

The popular apps have seen widespread use in recent years, though the government thus far has not adopted either one for any official means.

The parent companies of both apps have discussed this possibility with the Treasury Department, though it is unclear if the proposition has been seriously considered. Jack Dorsey, CEO of Cash App parent Square, made the case via Twitter, saying people needed help “immediately,” which his service could potentially provide.

Officials with Square and Venmo parent PayPal expressed optimism that the Treasury could potentially come around to utilizing their apps for payment services eventually, saying the talks weren’t close to done yet.

Though the money is planned to be distributed via direct deposit, that option may not be feasible for everyone. Fourteen percent of Americans making under $40,000 a year don’t have a bank account, according to figures published by the Federal Reserve in 2019, and Venmo, Cash App and other such services are available to even those without bank accounts.

Erica York, an economist with the Tax Foundation, said there could be potential for experimental thinking outside the box when it comes to people who don’t have normal bank accounts. However, with the size and scope of the crisis, she was unsure if the government had the requisite time to adapt to a whole new form of distribution because of the changes that would be needed to adapt to the apps.

Another challenge will be trying to get money to people who didn’t file taxes in the last year or two, as one of the main strategies the government is employing is using 2019 and 2018 tax return data to assess which bank account the money will be sent to, along with Social Security benefit statements as backup.

According to Treasury Secretary Steve Mnuchin, the payments, intended to alleviate fiscal stress during the coronavirus’ mass disturbance of the economy, should be coming within three weeks.

——————————

NEW PYMNTS STUDY: LEVERAGING THE DIGITAL BANKING SHIFT – SEPTEMBER 2020  

The September 2020 Leveraging The Digital Banking Shift Study, PYMNTS examines consumers’ growing use of online and mobile tools to open and manage accounts as well as the factors that are paramount in building and maintaining trust in the current economic environment. The report is based on a survey of nearly 2,200 account-holding U.S. consumers.

TRENDING RIGHT NOW