Beware of Peer to Peer Payment Apps such as Venmo, Zelle, and CashApp

Cashless payment transfer apps have become more popular in light of the pandemic. These apps, designed to quickly and easily effect cash transfers, may act like traditional banks, but have fewer protections against fraud. For this reason, it makes sense to use these apps judiciously.

 

Some of the more popular uses of these apps are to pay someone back for a shared restaurant bill, or sending money to family members. Since money is typically transferred from your checking account, cashless payment apps can be attractive targets for scammers.

 

Here are some best practices for using cashless payment apps:

  • Do not use them to purchase products. Anytime an online seller requires payment through an app such as Venmo, it is likely a scam.

 

  • Add stronger security to your app. Most payment apps allow the ability to create a PIN (personal identification number). Before sending out any money, your PIN number will be required.

 

  • Be certain of the username, address, and phone number of the person to which you are sending the money. Many scammers often create faulty usernames that can be easily mistaken for the person you intended on sending money to. Sending the money to the wrong person can often be impossible to retrieve.

 

  • Start by sending a small amount and checking with the person to ensure they received it before sending the full amount. In the end, if you wouldn’t feel comfortable handing the target person cash, don’t send the payment.

OWM provides financial planning, investment management, and retirement coaching to affluent individuals, business owners, and families.