According to a survey of 1,000 Americans conducted by SMS marketing platform SimpleTexting, people tend to use cash apps to pay family and friends. Six out of ten people prefer to pay with apps, compared to just 8% who prefer to pay with cash. Bank and wire transfers, as well as checks, were much less common choices.
PayPal, Venmo, and Google Pay are some of the most popular payment apps available today. Regardless of which one you choose, keep these 11 tips in mind to keep your money safe, stop fraud, and cut down on fees.
- Use a strong password.
- Set up two-factor authentication.
- Understand payment dispute policies.
- Link a credit, not a debit card.
- Minimize your account balance.
- Keep your payments private.
- Limit personal information in the app.
- Reduce your payment fees.
- Pay online retailers confidently.
- Avoid payment app scams.
- Review privacy policies.
Use a Strong Password
Like every other digital account, cash app passwords should be assertive and include a combination of letters, numbers, and symbols. Avoid using terms that are easily guessed, and make sure each account has its password. It should also go without saying, so don’t share your passwords with someone else.
Set Up Two-Factor Authentication
Turn on two-factor authentication in your account settings if it’s available. This security feature sends you an email or text message with a code that you must enter before logging in or sending money. According to Marcell King, chief innovation officer for Payveris, a digital payments platform, “it makes it a little more difficult for perpetrators to access your account.”
Understand Payment Dispute Policies
People should be aware that not all payment apps work in the same manner, and they should be mindful of whether and how an app can assist them if there is an issue with a payment or if a vendor fails to produce a purchase as planned.
According to Louis Hoch, CEO of Usio, a payment processing firm, PayPal has excellent dispute resolution policies. Apps like Venmo and Zelle, on the other hand, are designed to be used only by your trusted circle of friends and do not provide the same level of security. “There is no way to get the money back once you press a button on Zelle and submit the money,” Hoch says.
Link a Credit Card
Users can move money and make payments using cash apps by linking bank accounts, credit cards, and debit cards. “I prefer registering a credit card rather than a debit card if you do register a card,” King says.
If someone gains access to your account and uses a debit card to make payments, your bank account can become depleted as the charges are investigated. Credit cards shield you from this type of situation.
Minimize Your Account Balance
It’s possible that cash apps would allow you to keep track of your balance, but it’s not needed. “It’s not going to help you at all,” Hoch says. “You’re not making any money.” If you ever plan to keep a balance for budgeting or other reasons, save it to a minimum so you don’t risk losing a large sum if anyone gains unauthorized access to your account?
Keep Your Payments Private
Venmo is a social network that allows users to make their transactions public. Even if you believe you’ve just shared your payment information with colleagues, more people than you think may have access to it.
“Even if your account is set to ‘only,’ friends of friends will see your exchanges,” says Rachel Vrabec, founder of the digital privacy service The Kanary. Instead, she advises keeping an account private. “Payment details can seem innocuous, but having an extra layer of privacy around who you’re sending money to and receiving money from never hurts.”
Limit Personal Information in the App
People should refrain from providing payment apps with any information that isn’t appropriate. A picture, for example, and a phone number are both optional on many cash apps. If you choose to use Venmo’s “friends” feature, Vrabec recommends creating an alias for your name.
“Because PayPal is a popular target for hackers and has been hacked in the past,” Vrabec advises, “consider creating an alias email address (to register your account) that forwards information to your primary email.” If your account is hacked, fraudsters would not be able to access your primary email address, which is linked to other websites and services.
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Reduce Your Payment Fees
On many sites, avoiding fees is relatively easy. Using an account balance, a bank transfer, or a debit card to send money to another individual is usually free.
However, using a credit card to transfer money can result in a fee. Not only does the app charge a fee, but the transfer could be classified as a cash advance by the credit card company. The issuer could then charge its own fee for these transactions and a higher interest rate.
“Both PayPal and Venmo will try to persuade you to pay them so you can get your money quicker,” Vrabec says. Sending money to and from your bank account is usually free if you don’t need an expedited transfer.
Pay Online Retailers Confidently
PayPal began to transfer money from one person to another, but it is now a payment option on a variety of websites. “Other than a one-time (use) card, it’s possibly one of the best mechanisms for making transactions on the internet,” Hoch says.
Using a credit card to make a merchant purchase through PayPal incurs no additional costs, and there is an added benefit. “It decreases the number of places where your card information is stored,” King says.
Avoid Payment App Scams
Scammers use a variety of methods to attack payment apps like PayPal and Venmo. They may send phishing emails that appear to be from the bank, claiming that an account has been locked or that a significant transaction has been made. If you’re worried about your account’s status, open the app on your phone or type the website address into a new tab to log in and verify the message’s validity. “Do not open random emails,” King advises.
Another popular scam involves people sending Venmo payments at random using stolen credit card numbers. They then contact the individual who got the payment and inform them that it was sent in error and that it should be returned. Before doing so, Hoch advises contacting Venmo to double-check the validity of the initial transaction.
“If someone you don’t know repeatedly asks for money from you, block them,” Vrabec advises.
Review Privacy Policies