Are Money Transfer Apps Safe

Peer-to-peer payments (P2P) make splitting bills with friends and paying for goods or services easy and convenient. Money transfer apps — like Zelle®, Venmo©, PayPal©, and Google Pay™ — allow users to send money from their mobile devices through a linked funding source. But their convenience is why scammers find them so attractive. Unfortunately, digital money movement fraud is on the rise, and it can be hard to trace and recover funds.

Here’s what you should know about how P2P apps work, and how to use them safely.

Let’s say you need to give your sister money for your parents’ anniversary gift. You would simply open your app, select “little sister” from your contacts, and enter the amount you want to send. Within a few moments she’ll get a notification that you’ve finally fulfilled your financial obligation. Your sister can leave the money in the app or transfer it to her bank account.

P2P payment apps are safe and there should be no hesitancy in their security, but they’re not foolproof. A mistake could cost you when sending money.

“Because the money is immediate, you want to make sure your payments are to people you know and trust,” explains Bobbi Weber, Fraud Operations Group Manager and Senior Vice President of Fraud and Claims at Citizens.

It’s important to understand that you may not get that money back, as current laws do not require P2P services to return or help recover the funds. It’s best to treat a P2P app like you’re using cash.

All apps aren’t created equal — they’ll have varying security measures in place to help prevent honest mistakes and dishonest fraud. It’s important to do your research before choosing an app.

P2P apps are easy to use and are secure but, unfortunately, scams are possible. Criminals can impersonate a bank and make you believe your account is in jeopardy, or pose as a business asking for payment for a product you never received.

"The primary risk today is bad actors contacting customers via call, text or email pretending to be from their bank, or a company they do business with, and convincing the customer to provide information like online banking credentials or a one-time passcode, which we would never request unless the customer initially contacted us, not if we contacted them,” Weber notes.

• Anyone calling or texting who claims to be from a government agency
• Banks and utility companies calling you to settle accounts
• Someone asking for your online banking credentials via text
• Any stranger, no matter what reason they give
• Anyone claiming your account is compromised
• Unauthorized, unverified cryptocurrency sites or salespeople
• Anyone asking you to send money to yourself

Also, beware of Caller ID Spoofing where scammers use what appears to be a valid phone number.

While “quick and easy” is the basic premise for P2P, taking a few extra seconds to enable security features can save you a lot of stress and money.

Here are a few things you can do to help protect your money:

Enable additional security settings: Many apps will default to the lowest security settings, which means if someone has your phone, they may be able to send money to anyone without being asked for a PIN, fingerprint, or password.

Double-check the recipient’s info: Before you press send, confirm the username, phone number, photo, or other identifier. Some platforms offer to send a special code to confirm that the person you’re sending money to is your intended recipient.

Turn notifications on: Some platforms do this automatically; if not, go to the app’s settings and turn on notifications. You’ll get an email or text any time there’s a transaction on your account.

As much as you like to think you’re staying a step ahead, things happen. “If a customer feels that they have been a victim of a phishing attempt, they should immediately secure the info they provided. If they provided their PIN, they should change it. If they provide an account number, they should alert their bank and have accounts reissued,” advises Weber.

Money transfer apps are a great way to simplify your life — if you use them safely. It’s important to do some research and find an app that you trust. Your bank may offer Zelle® within your online banking or mobile app, so you may not need to download anything else. Unfortunately, fraud happens, so do your best to safeguard yourself and your personal information when sending and receiving money.

Want to quickly and easily send and receive money with people you trust? You can enroll in Zelle® by downloading the Citizens Bank mobile app or enrolling in online banking.