Are peer-to-peer money-transferring apps safe?

Whether you’re paying a friend back or splitting a bill, peer-to-peer payment (P2P) money transfer apps – such as Venmo, Zelle and PayPal – allow users to send money from their mobile devices. It makes paying easy and convenient.

How does it work?

Say you’re splitting the cost of a gift and you need to give a family member money for your half of it. To pay, you would log in to your money-transfer app, find him or her in your contact list, enter the amount, and send. Within seconds, your family member will receive a notification. He or she can leave the money in the app, or transfer it to a checking account. If a person receiving the money doesn’t have the app, they may be notified to download the app and collect the funds.

P2P payments digitize transactions by initiating payment directly from a bank account without the use of a card.

Is P2P apps safe?

P2P payment apps are encrypted and secure to protect your financial information and funds. However, they aren’t always foolproof. Hackers and scammers have targeted P2P payment apps.

Here are a few measures you can follow to keep your money safe:

  • Enable two-factor authentication and a PIN before completing a transaction.
  • Set up alerts about every transaction.
  • Don’t pay strangers with P2P payments. Only send money to people in your contacts.
  • Review the recipient’s information before you send a payment.
  • Link your P2P payment account to a bank account, credit, or debit card. This protects you under Federal law if your funds are misdirected.

What to do if it’s a scam

If you think you fell victim to a scam, consider these tips:

  • If the P2P payment account is linked to a bank account or card, contact Adirondack Bank. Inform us of the fraudulent transaction.
  • If the payment can’t be cancelled, reach out to the payment app for support and request a refund. Review the P2P payment app’s disclosures for details regarding fraud policies.
  • Report the scam. When you report it to the Federal Trade Commission, they can spot trends and build cases against scammers.

Remember …

P2P money-transfer apps can be a convenient way to send money, but remember to use them safely. Before signing up, research the apps and find one you trust. Always be vigilant to protect yourself and your personal information when sending and receiving money.

The information is this article was obtained from various sources not associated with Adirondack Bank. While we believe it to be reliable and accurate, we do not warrant the accuracy or reliability of the information. Adirondack Bank is not responsible for, and does not endorse or approve, either implicitly or explicitly, the information provided or the content of any third-party sites that might be hyperlinked from this page. The information is not intended to replace manuals, instructions or information provided by a manufacturer or the advice of a qualified professional, or to affect coverage under any applicable insurance policy. These suggestions are not a complete list of every loss control measure. Adirondack Bank makes no guarantees of results from use of this information.

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