How to Safely Use Payment Apps

Kimberly Palmer

As a frequent PayPal user, I wasn’t surprised to see an in-app payment request pop up. But when I read it, I knew something was wrong.

In the message, a stranger asked me to send them $699 to get a “refund”. Although I immediately recognized the request as a scam, I still felt vulnerable; I didn’t immediately see any obvious way to flag the request as a scam, and with just one click I could have sent this stranger a lot of money.

I’m hardly alone in my concerns about security when using peer-to-peer payment apps: According to a Pew Research Center survey published in September 2022, about one-third of people using apps or websites pay says it has “little or no confidence that payment apps or websites protect personal information from hackers or unauthorized users.” And 13% of people who have used PayPal, Venmo, Zelle or Cash App said they made the mistake of sending money to a scam artist.

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Fraud prevention experts recommend these strategies to keep your money safe.

Only send money to people you know

Basically, peer-to-peer payment apps are designed to send money between friends – not strangers. If you use them to send money to people you don’t know, you risk being exposed to fraud.

“You should not send money until you have met people in real life and you know who you are sending money to. If you do that, and are careful about the numbers you send money to, these apps can be a convenient, safe and effective way to send money,” said Paul Benda, senior vice president of risk and security. on the Internet. the American Bankers Association, the trade association for the banking industry.

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Use cash and credit cards in more risky situations

If you need to exchange money for goods or services with people you don’t know, the safest way to do it is with cash or a credit card, says Axton Betz-Hamilton, assistant professor at the Southern School of Health and Consumer Sciences. Dakota State University and author of “The Less People Know About Us,” a memoir about identity theft.

Credit cards, for example, have fraud protection. “I want that security, so I don’t use those apps,” he said.

Although it may be more difficult to recover stolen money, your homeowner’s and renter’s insurance may be covered (up to your policy limits and depending on your policy).

Beware of unsolicited texts, calls or requests

Scams are usually when scam artists send text messages, phone calls or other types of messages urging you to send money, perhaps saying you’re due a refund or that you’re late on a bill.

“Fraudsters just keep getting better at what they do,” said Joel Williquette, senior vice president of risk policy at the Independent Community Bankers of America, a trade group for community banks. -community. This includes sending emails that are almost indistinguishable from legitimate bank emails.

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Cybercriminals may impersonate the IRS or FBI and ask you to send an immediate payment to settle a debt, but Williquette said the legal agency won’t contact you by text or call your phone. the request for urgent money.

“Usually, they send you a letter,” he says, and don’t ask for payment through the app or a gift card — another red flag.

Fraudulent payment requests sent to peer-to-peer payment apps “are often for small dollar amounts and may even appear to be from friends,” said Eva Velasquez, president and CEO. the Identity Theft Resource Center, a non-profit organization. .

Velasquez encourages people to verify requests first by double-checking that they’re sending money to the right person, adding that it’s easier to get scammed when you’re busy and multitasking.

Improve your cyber hygiene

Enabling two-factor authentication on your financial accounts, adding a lock pin to your phone and using a unique password that’s at least 12 characters long can help protect you, Velasquez says.

In addition, he recommends setting your app’s privacy settings to the most private option to minimize the amount of information about you that is available to the public.

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An attempt at fraud

According to PayPal, if you receive a payment request like I did, you should cancel the request without paying. Additionally, you can take a screenshot and send it to [email protected] PayPal advises that you should not respond to, open links, download attachments or call the phone number included in the request.

If you have mistakenly disclosed your financial or personal data to a fraud artist, PayPal says you should immediately change your password, alert your bank and report any unauthorized payments to PayPal. You can also report fraud to the Federal Trade Commission at, a government website that shares information with law enforcement.

In my case, I followed the recommended steps to cancel the payment request and never heard from my scam artist again. With improved security steps, I plan to continue to take advantage of the convenience of PayPal and other payment applications – and now I know what to do the next time I receive an unsolicited payment request.

This article was written by NerdWallet and originally published by The Associated Press.


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