Buckle up for a quick ride onto the mobile payment superhighway. At one time, making payments was confined to writing paper checks or credit card swipes. Like consumer space flight, a new reality is here with the introduction of numerous new payment formats, including digital payments apps. These apps can be a wonderfully easy, helpful tool for making quick payments or frustrating misadventures if you utilize the wrong app for the situation. If you don’t know who you’re paying on the other end, mainly through third-party apps, you’ll want to take steps to protect yourself adequately. Here are some tips we’ve compiled about how to keep your money and accounts safe from possible fraudsters and scammers.
Send Digital Payments Via Your Bank When Possible
Several banks utilize a service known as Zelle, which is a digital payment system between banks. Your money will flow easily from bank to bank, and this is much more secure than letting your money go on the proverbial wind. Even if your bank does not participate in the Zelle network, most banks have a similar feature for sending peer-to-peer payments.
Using Zelle is a great entry point into trying the new payment methods. You simply need the recipient’s email or mobile number to send the funds to people you already know.
When you utilize your bank and their fraud protections, then the bank is more able to help in the case of fraud and you have a chance to get your money back. If you suspect fraudulent transactions be sure to report them to your bank immediately. Your banking institution can only help with fraudulent transactions as frauds are different from scams. Here is Zelle’s brief article on the difference.
Third-Party Payment Apps
A payment app such as Venmo, Cash App, Google Pay, or PayPal can be a helpful tool when you have no physical contact with the payee or if you want to protect your identity and any payment information from the seller. PayPal is an excellent tool for a one-time online purchase. However, if you send money as payment for goods or services via other third-party apps, there are some things to consider.
Venmo, owned by Paypal, has become one of the popular apps for sending payments. It can be too easy to send money in this way without a few precautions. Here is a list of questions you want to ask yourself before sending money via Venmo, or any other third-party apps.
Do you know who you’re Venmo’ing? If not, it’s best to use Paypal as very little information is given to the recipient.
Do you know your payee personally? If not, you’ll want to limit the details you give in Venmo and hide the payment from your social feed.
Will you be making single or multiple payments? If your payment is for goods or services, consider using Zelle. Venmo now assesses a fee to the recipient for these transactions. Zelle is better-suited for sending large or recurring payments.
How much money are you sending? If you’re sending a large sum, consider sending a few smaller payments to an unknown party. This reduces the risk of fraud if you can’t afford to lose the amount of the transaction.
As a rule, you’ll want to be careful with any payment apps, as once the money is sent, it’s gone. There is likely no way to get it back if payment was in error; examples include overpaying, paying the wrong user, or even being the victim of a scam. You’ll want to make sure those who receive your money on the other end are both legitimate and the intended receiver. If you do not personally know the payee, double-check the user profile information before you click send. Don’t be in a hurry; user account names are often very similar, quickly allowing you to pick the wrong recipient. If money is sent to the wrong recipient, then having your money returned becomes complicated, as you’re now relying on the benevolence of a stranger.
Treat your payment apps like another bank account. Do not keep large balances, and transfer sums of money back to your bank account. Also, we suggest limiting your use to just one or two of these tools to embrace the new tech but avoid unnecessary risks of having too many user accounts.
Western Union isn’t Necessarily Safe Either
It wasn’t too long ago that Western Union was a trusted name to transfer money. However, with fraud rampant these days, Western Union has become a favorite with scammers, especially among the older crowd who still trust Western Union as an institution.
As with Venmo, once the money is gone, it is gone, and you will not be able to get it back. Even Western Union warns of this possibility in their terms and conditions. Western Union does not guarantee the payments you send through its service. Unless you know the person on the other end, you’ll want to use Western Union sparingly, if at all.
Be Careful Out There
An app like Venmo is easy to use, but it also makes it easy to fraud those on the other end. Be sure to talk to your teens about using these apps and how to protect their accounts and privacy. Here are some things to keep in mind with regards to your kids.
Don’t let teens keep large sums of money in their accounts. This method could be bad news if anyone ever gets unauthorized access to their phone and spends the funds.
Even if your child is the one making payments, Venmo, by default, shares your payment details and comments to other users, not just those privy to the transaction. This setting could be inappropriate or bring unwanted attention to your account details.
When you need to send a digital payment, be aware of who you’re sending it to. Never blindly trust a stranger on the other end. Whenever possible, send your payments via a bank-backed app, such as Zelle, and always double-check if the payee is a legitimate business. Once your money is gone, you won’t get it back. From now on, you’ll want to be shrewd with your financial dealings online.
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