By: Consumer Reports Updated 02 May 2022, 18: 02 pm EDT
You’ve probably heard of P2P payment methods like Cash App, Venmo, and Zelle, or maybe you’ve already used them. These applications are usually linked to the bank account and allow you to send money to someone or accept a payment instantly.
This can be useful in situations such as a group dinner in a restaurant. Instead of splitting the bill between multiple credit cards, everyone can P2P send their share to one of the guests, who can then use a single credit card to cover the bill.
However, this service can also generate some inconveniences. “Some of the same qualities that make P2P services so attractive to consumers — speed and convenience — expose them to significant risk,” explains Chuck Bell, director of program advocacy at CR and financial policy advocate.
With credit cards, you are not responsible for no more than 50 dollars in case of fraud or a payment made by mistake.
With credit cards, you will not owe more than $50 in case of fraud or a payment made by mistake. But P2P payment services generally offer little or no protection against scams, for example, in case you pay for an item like a concert ticket, even though you don’t receive it. Some P2P apps will mediate if you accidentally paid the wrong person, but they won’t reimburse you directly.
This is why it’s key to only use P2P with people you know and with whom you trust, Bell maintains. And he double checks that you’re sending the money to the right person. CR experts also recommend the following:
• Do not use P2P services for commercial purposes. Instead, look for a payment app built for business users, like Square Cash for Business or traditional PayPal (but not its Friends and Family option, which offers fraud protection only in certain circumstances).
• Keep the app up to date.
The latest security updates can help protect against theft.
• Alert the P2P service if something goes wrong.
Also, inform your bank or credit card provider; There is no guarantee that they will be able to help you, but there is a possibility. And file a complaint with the Better Business Bureau. Businesses accredited by this entity must answer, says Sandra Guile, director of communications for the International Association of Better Business Bureaus. You can also file a complaint with the Consumer Financial Protection Bureau’s Consumer Complaint Database.
Editor’s Note : This article also appeared in the May issue of 2022 of Consumer Reports magazine.
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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 © 2022, Consumer Reports, Inc.