Peer-to-peer mobile payment apps poses risk for users

While peer-to-peer mobile payment apps like Venmo and Zelle are convenient, they come with risks, Consumer Reports said.

Consumer Reports said that these companies need to do more to protect consumers’ privacy and prevent fraud.

“Peer-to-peer payment apps are an easy and convenient way to send money to others with a few taps on your phone,” said Delicia Hand, director of financial integrity for Consumer Reports. ,” said Delicia Hand, director of financial justice for Consumer Reports. “But customers can lose money if they send payment to the wrong person or fall victim to fraud or fraud and put themselves at risk when using a P2P payment app.”

A 2022 survey found that 64 percent use these apps, with at least two out of five using them monthly.

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Of those who use the apps, Consumer Reports says 12 percent have sent money to the wrong person and 9 percent have been scammed.

Consumer Reports said the apps won’t reimburse customers who send money to the wrong person, and they won’t reimburse users who are victims of fraud.

The group also says that these mobile apps collect a lot of information about users and make it difficult for users to delete them.

Consumer Reports are published the following recommendations for users of these apps:

  • Verify the recipient’s experience before sending money. Do so with a phone number, email address, or QR code. Cash App, Venmo and Zelle give users the ability to scan a QR code that appears on the recipient’s screen.
  • Send a $1 payment check and make sure it’s received by the right person. That’s especially important if you’re sending a lot of money.
  • Transfer money from your P2P account to your bank account as soon as possible. That shows that your money is FDIC insured in your bank.
  • Enable all the identity verification options available in the P2P app. With this feature enabled, anyone trying to use the code must go through additional security measures, such as two-factor authentication.
  • Actively monitor your P2P accounts. You may be able to catch problems early enough to report them to the company and not be on the receiving end of illegal payments.
  • Uninstall any P2P apps you don’t use. It’s not enough to just remove the app from your phone; Alternatively, to confirm that you have closed and deleted the account, select the “delete account” option in the app.
  • Opt out of the arbitration agreement if possible. Cash App, Venmo and Zelle give users 30 days to opt out of the requirement by sending a notice. Apple Cash does not allow users to opt out. And if you have a dispute, try to negotiate with the company before proceeding to order.
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