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

Consumer Reports said these companies need to do more to protect user privacy and avoid scams.

“Peer-to-peer payment apps are a convenient and easy way to send money to others with just a few taps on your phone,” said Delicia Hand, director of financial equity for Consumer Reports. “But consumers can end up losing money if they send a payment to the wrong person or fall victim to fraud or scams and put their privacy at risk when using a P2P payment app.”

A 2022 survey found that 64% used such apps, with at least two in five using them monthly.

Of those who use the apps, Consumer Reports said 12% had accidentally sent money to the wrong person and 9% had been scammed.

Consumer Reports said the apps will not reimburse consumers who accidentally send money to the wrong person, or compensate users who have been scammed.

The group also claims that these mobile apps collect large amounts of user data and are difficult for users to delete.

Published Consumer Reports the following recommendations to those who use these applications:

  • Confirm the recipient’s identity before sending money. Do it with a phone number, email address or QR code. Cash App, Venmo, and Zelle allow users to scan a QR code that appears on the recipient’s device.
  • Send a test payment of $1 and confirm that it was received by the correct person. This is especially important if you’re sending a lot of money.
  • Transfer money from your P2P account to your bank account as soon as possible. This ensures that your funds are FDIC insured at your bank.
  • Enable all identity verification options available in the P2P app. With these features enabled, anyone trying to use the account will need to go through additional security measures, such as two-factor authentication.
  • Frequently monitor your P2P accounts. You may be able to catch problems early enough to report them to companies and not be liable for unauthorized payments.
  • Delete any P2P application you don’t use. It’s not enough to just delete the app from your phone; instead, to ensure that you have closed and deleted the account, select the “delete account” option in the app.
  • Opt out of binding arbitration if possible. Cash App, Venmo, and Zelle give users 30 days to opt out of the requirement by sending a written notice. Apple Cash does not allow users to withdraw. And if you have a dispute, try to negotiate with the company before going to arbitration.

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