Bank Accounts vs. Apps: How Black Entrepreneurs Can Bulletproof Their Funds

June 29, 2023

Every dollar counts when you're paving your way in the business world. As Black entrepreneurs, we know the importance of financial security. Recently, however, a wave of concerns has been raised about the reliability of mobile payment apps, such as CashApp and Venmo, emphasizing the need to protect funds more securely.

This month, CashApp users experienced a disconcerting issue: accounts showing negative balances due to double-charged transactions. The surprise was far from pleasant for those using the app to manage significant sums. While CashApp has pledged to rectify the issue and refund any duplicate charges, this incident has understandably shaken users' confidence.

These incidents are a stark reminder of the potential risks of mobile payment apps. The Consumer Financial Protection Bureau (CFPB) recently warned that funds in these apps do not receive the same federal protections as those in traditional bank accounts. The CFPB recommends holding funds in an account with federal deposit insurance to protect against theft or company failures.

So, how can we, as Black entrepreneurs, protect our hard-earned money? One simple solution is to use traditional banking systems. By keeping money in banks or credit unions, we can benefit from federal deposit insurance, ensuring our funds are safe even if the institution fails.

As we strive to build wealth and contribute to our communities, let's prioritize our financial security. As Black entrepreneurs, HBCU students and alumni are making waves, and we must safeguard our funds against potential risks.

Remember, every dollar counts in our journey to success. Protecting funds by choosing the right place to store them is a step toward that success.