For: Consumer Reports Posted 24 Jan 2023, 17:01 pm EST
A Consumer Reports analysis of Apple Cash, Cash App, Venmo and Zelle uncovers ways to keep your money and information safe.
By Lisa L. Gill
Peer-to-peer (P2P) payments through Apple Cash, Cash App, Venmo, and Zello are more popular than ever: Nearly two-thirds of Americans use a P2P app to send money to friends, family, or others , based on a nationally representative survey of 2,116 U.S. adults conducted by Consumer Reports in March 2022 (PDF).
For that reason, Consumer Reports recently took a close look at the fine print of how these services operate. Here we have put together a list of simple steps you can take right now to minimize the risk of making a mistake and keep your funds and information safe.
Confirm the recipient’s identity before sending money. Remember the old carpenter’s saying: “Measure twice, cut once”? The P2P equivalent is double-checking the recipient’s phone number or email address before hitting send. All of the apps we’ve reviewed use in-app alerts to encourage senders to confirm that information. Some of the apps also offer fail-safe technology tools. For example, Cash App, Venmo, and Zelle offer users the ability to scan a QR code on the recipient’s mobile device (if they are physically nearby).
Send a small test payment and confirm that the correct person received it. These kinds of “micropayments,” which can be anywhere from a few cents to a dollar, are especially important if you plan to send a lot of money later. If the test payment is not received, verify that you have the correct P2P account information for the recipient and try another micropayment.
Transfer the funds that enter your P2P account to your bank account as soon as possible. This ensures that your funds are covered by Federal Deposit Insurance Corporation (FDIC) insurance.
Activate all the identity verification options available in the P2P application. With those features turned on, anyone trying to use the account will first have to go through additional security measures, such as double authentication.
Check and adjust your app’s default privacy settings. This will minimize the amount of personal information that is collected and shared beyond what is necessary for the provision of the service.
Check your P2P accounts frequently. That way, you’ll be able to catch problems early enough to notify companies and avoid having to deal with unauthorized payments, says Ed Mierzwinski, senior director of the federal consumer program at the nonprofit US Public Interest Research. Group (US PIRG). He considers checking them weekly.
Remove your account from any P2P applications that you no longer use. It’s not enough to just delete the app from your phone; To make sure that you have closed and deleted the account, select the “delete account” option within the application.
If possible, waive binding arbitration. Cash App, Venmo, and Zelle give users 30 days to waive this requirement by sending written notice. (Apple Cash does not allow users to opt out.) And if you have a dispute, try to negotiate with the company before going to arbitration. Many companies try to settle to avoid the risk and expense of legal proceedings.
Consumer Reports is an independent, nonprofit organization that works side by side with consumers to create a fairer, safer, and healthier world. CR does not endorse products or services, and does not accept advertising. Copyright © 2023, Consumer Reports, Inc.
Consumer Reports has no financial relationship with the advertisers on this site. Consumer Reports is an independent, nonprofit organization that works with consumers to create a fair, safe, and healthy world. CR does not endorse products or services and does not accept advertising. Copyright © 2023, Consumer Reports, Inc.