Are All Those Payment Apps Safe to Use?

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In olden times, businesses accepted cash or checks. Credit cards came along in the late ’50s to add one more option. These days, though, it seems the options are closer to infinite in number. Zelle, Venmo, Paypal, Cash and several dozen minor players want you to use them to reimburse a friend for dinner or buy that chest freezer you saw on Facebook. Can they be trusted?

The short answer is yes, but with the caveat that you have to be careful. As with all financial transactions, taking precautions with these “peer-to-peer” payment apps can be a good idea. 

First, always verify to whom you’re sending funds. The app doesn’t know if your intended recipient’s address is misspelled and will happily send the money to the wrong person. While some apps offer a process to iron this out after the fact, it’s not guaranteed. Double-check the TO field BEFORE you hit Send. Unlike credit cards, where your liability is limited to the first $50, most payment apps have no such protection.

Also, watch out for hacked accounts of people you know. If a message pops up, supposedly from an acquaintance or family member, urgently asking for money, verify that it is legitimate. Do this by contacting them outside the app (phone call, text message, email) to ask if it was really they making the request.

Beware of bogus text messages that purport to come from the app vendor, offering special promotions or cash rewards. Such unsolicited messages are always a scam, just delete them.

The payment apps are also used for scams involving part-time jobs. Here you get funds from the “employer” in the form of a check and are then asked to refund a supposed overpayment via Venmo or Zelle. Only after you have paid the “overage” do you find out the original check has bounced and the “employer” is not returning your email.

As with all software, keep the apps up to date. On your phone, turn on automatic app updates to do this in the background so you don’t forget. On your computer, where you usually access the payment app in a web browser, this should be an automatic feature.

Remember that apps like Zelle, Venmo and Cash are not designed for full-scale business transactions. While most apps don’t charge extra for occasional personal use, if you try to run a small business with them, you may be subject to a surcharge. Better to use Paypal for Business, Square or similar service. While they may cost more, they also offer more protection for business dealings.

Did you encounter a problem? You should notify the app’s customer service immediately. Don’t do a Google search for the app vendor’s tech support number – scammers frequently hijack these search listings to defraud unsuspecting users. Look instead in the Help or FAQ section of the app for a phone number or web address. Also, let your bank and/or credit card company know of the problem, depending on where your funds originated. 

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