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Smartphone Giving, Part 3: Safety, Privacy, and Legality?

Courtesy Photo.
Courtesy Photo.

Part 3 of a 3-part series

IS THIS A SAFE WAY FOR PEOPLE TO GIVE?

In most cases, peer-to-peer money apps do not have the same level of security that an online giving platform using credit cards does. Scams have been plentiful for Venmo, Cash App, and Zelle. As with online giving platforms, an app for smartphone giving should provide details on their security used to guard donors’ information. If the platform does not offer adequate information about security in a detailed and transparent way, you may want to look elsewhere.

WILL IT PROTECT THE PRIVACY OF OUR DONORS?

If you have used Venmo, you may have noticed that beyond being just a tool for moving money from one person to another, it is a social app. The social component is that those in your social network can see what amounts (and messages) you’ve sent to others via Venmo unless you have intentionally opted to make the information private.

Unlike Venmo, Cash App doesn't try to be a money-oriented social network. As a result, it avoids some of the fundamental privacy problems built into Venmo's DNA. However, Cash App still collects data from users about their preferences, where they shop, and what they buy. Zelle does not offer any social media experiences, and since transfers are from bank account to bank account, it is fair to expect that giving data will be much more private. Admittedly, this is hard to confirm with so many different banks participating.

WILL IT AFFECT OUR RECORDING, ACKNOWLEDGING, AND REPORTING GIFTS?

This is a very important question and consideration, but one that is so context-specific that an answer can’t be provided here. It is important to understand the limitations of the smartphone giving apps and what information your church usually receives from donors. Most of these apps will give the church the name, amount of the gift, and a transaction ID. If the donor is someone already in your contribution database, you would need to find that record, manually record the gift, and find a way to record the transaction ID (in the event of multiple gifts from that person in the same amount). If the donor is not in your database, (perhaps a first-time giver) you’ll probably have to track the person down to get the additional information you need to create the donor record. Doing this is also important to enable you to acknowledge and thank the new donor.

ARE THERE LEGAL CONSIDERATIONS THAT APPLY TO THESE DONATIONS?

Beginning in 2022, the IRS will track the use of Venmo, Cash App, Zelle, and PayPal payments to recover tax revenue that has gone unreported through peer-to-peer transactions – the equivalent of “paying someone under the table” in the pre-digital culture. These third-party payment companies will report to the IRS if you receive more than $600 per year.

Churches that have a tax-exempt status will not be affected by this, provided their finances are in order.

Finally, the fear of being scammed can immobilize us or force us to lose faith in all digital systems that touch every part of our lives. We can choose to be afraid and hide in our closets with a bag of money, or we can educate ourselves and be wary travelers on the digital highway of life. However, be aware that many vendors that offer online giving platforms tend to publish articles that stoke fear and highlight the dangers of using smartphone apps. Respected news sources may have less biased information.

excerpt from a story by Rev. Ken Sloane, Director, Stewardship & Generosity, Discipleship Ministries

United Methodist Church Giving is about people working together to accomplish something bigger than themselves. In so doing, we effect change around the world, all in the name of Jesus Christ. To read stories about the generosity of United Methodists click here.