Money transfer apps including Venmo, Cash App and PayPal have surged in popularity during the pandemic as people seek safe, contactless ways to send and receive money. Unfortunately, many people don’t understand the limitations of these payment platforms or how they can put someone’s finances at risk.
Like over-the-counter medicines, payment apps can be safe when used as directed — but people often don’t read the directions, says James E. Lee, chief operating officer for the Identity Theft Resource Center, a nonprofit that provides victim assistance and public education about identity theft.
“You’ve got to make sure that you’re doing the right things,” Lee says. “Because if there is a weak point in these kinds of services, it is that your behavior may make it less secure.”
QUICK AND CONVENIENT
Mobile payment apps allow people to transfer money to others quickly, often for free. They may be downloaded to a phone or other mobile device or accessed online. Some payment systems are available via social media, email accounts or other apps.
Apps such as Venmo and Cash App are known as “peer-to-peer” platforms because they’re designed to facilitate transfers among friends and family. People can search for each other using email addresses, phone numbers or user names, and money is usually transferred within one to three days. Some let users choose an instant transfer for a small fee.