PayPal, Zelle, Snapcash, Square Cash, Venmo, Popmoney — the world is flush with peer-to-peer (P2P) payment services. Go above and beyond to keep your money safe by doing the following when using P2P services:
- Add a PIN or two. Each platform should have a way to add and require a personal identification number to complete transactions. For added protection, set one up on your mobile device, too, so in case you ever lose your phone it’s not exactly like you lost your wallet as well.
- Opt in for notifications on every transaction. Some platforms do this automatically, but if yours doesn’t, dig into your settings so that you get emails or texts any time there’s a transaction on your account.
- Confirm that you can find help if things go wrong. Some P2P apps make users resolve their own disputes. Others offer significant help to resolve issues. Before using any P2P service, search the app for customer service contacts and procedures so that you know where to go and what kind of help to expect.
- Know who you are paying. Pay and receive money only with people you know. Don’t pay strangers with P2P. Many peer-to-peer transactions are instantaneous and irreversible. Scammers try to get you to pay them in many different ways—including by sending money online—so make sure you know who you’re sending money to. If you use the service to receive money from someone you don’t know personally—maybe as payment for tickets to a concert or a game, or for an item you’re selling—transfer the money to your bank account and make sure the money is there before you send any goods. Read the terms of service if you’re not sure if these kinds of transactions are permitted on the service you use.
- Use a protected payment source. Link a credit or debit card when using peer-to-peer payment services so if your money is misdirected, you can have the error resolved by federal law. If you use funds kept in the P2P account, you are subject to state laws and the provider’s own policies, which can vary.
- Don't make errors. If you mistype a recipient’s email address, phone number or name, the money could go to the wrong person. Double-check the accuracy of your recipient’s information before you send off a payment.
- Security and user experience: The service should be easy to use and understand, and be secure. Most well-known platforms have good security in place, but you should still err on the side of caution. Avoid apps that have bad customer ratings and bad histories with data breaches. Peer-to-peer payment systems require access to your financial information, so check your account settings to see if you can enable additional security measures that aren’t on by default. Consider turning on multi-factor authentication, requiring a PIN, or using fingerprint recognition like Touch ID.
- Don’t use P2P services for business purposes. Most apps’ terms of service prohibit commercial use, such as using the P2P service to get paid for selling goods or services. Look instead for a payment app specifically meant for business users, such as Square Cash for Business, or PayPal. Read the terms of service if you’re not sure if these kinds of transactions are permitted on the service you use.
- Social Sharing. Some systems or apps might share information about your transactions on social media. Check social media permissions or settings—some may be set to share your information with everyone by default. Adjust your settings based on what you’re comfortable sharing.
- Keep your app up to date. Hackers exploit security vulnerabilities sometimes faster than the security pros can plug them. If you have old software, you’re missing the latest protections. Make sure you have auto-updates turned on for your device across the board.
Here are some examples of P2P scams:
- A fraudster may place a false online ad for merchandise, and after you pay for the merchandise through a P2P payment service, the fraudster keeps the money and never actually sends you what you purchased.
- You receive a text message regarding a recent charge on your debit card, and it asks you to verify the transaction. You reply that you don’t recognize the charge in question. You then receive a phone call from what appears to be your financial institution's 800 number, and someone claiming to be an employee requests you verify your account information, including your online credentials and a texted verification code. If you provide the information, the fraudster will then use it to log in to your account and use the linked P2P payment service feature to transfer funds.
- You are hired for a job and receive a fraudulent check from the 'employer'. You are told by the “employer” to deposit the funds using mobile check deposit, and to transfer the funds out using a P2P payment service. By the time the check bounces, the funds are already gone.