SAN ANTONIO – Cash may be king, but many people don’t carry it much any longer. They use peer-to-peer payment apps like Cash App, PayPal, Zelle and Venmo. But what happens if something goes wrong?
Once you’ve sent it, you’ve spent it. That’s what may electronic payment apps tell their users. Peer-to-peer payment apps are fast and convenient, but Consumer Reports warns that the lack of protections can make them attractive to fraudsters and risky for consumers.
“The main risk in using a P2P app is that you have no recourse in getting your money back if you send money to a scammer or to the wrong person or if you send the wrong amount because of a typo,” said Consumer Reports’ Octavio Blanco.
Last year along, the Federal Trade Commission received more than 70,000 reports of fraud with $130 million in losses from payment app use.
Mobile payment apps are under fire from consumer advocates demanding protection from fraud and user mistakes. For now, here is one way to protect your payments.
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“Link your credit card to the app and fund your payments through the credit card,” Blanco said.
That way, you could get the same purchase protections that your credit card offers. It may not be free, though. Many apps charge about three percent when you use a credit card.
If you want to keep your P2P app linked to your bank account, Blanco offers a word of caution.
“If you are going to be using your P2P account for things like sending money to people you don’t know, you…