(CONSUMER REPORTS/WTVF) — It used to be cash, check or credit were the only ways to pay. Now, of course, there are also peer-to-peer (P2P) payment apps like Venmo and Zelle. They can make sending money to someone really easy – but there's a catch.
A lot of these apps don’t offer the same level of protection against scams that most credit cards do, and that's why online scammers love them. So, here's what you can do to make sure you don’t fall victim.
Consumer Reports says to only send money to people you know and trust. Also, exercise caution when paying businesses with P2P apps.
“Peer-to-peer payment apps aren’t banks and they’re not credit cards, which makes it much harder for consumers to have recourse and get their money back,” said Octavio Blanco, Consumer Reports Money Editor.
In an AARP survey of Americans 18 and older, more than half of respondents incorrectly thought they could reclaim money sent in error when using peer-to-peer payment apps.
Early Warnings Service, the network operator behind Zelle told CR that Consumers should only send money to people they know and trust when using Zelle. Treat it like cash and beware of “too good to be true” situations.
“Until laws are changed, then consumers are going to have to be really careful when they use peer-to-peer payment apps,” said Blanco.
If you have any suspicion of something being a scam, go to the Better Business Bureau’s scam tracker website. It can give you a better idea if the product or service you’re looking for is an easy scam target.
Also, you don't want to use a P2P app for business purposes. The terms of service for most of these apps prohibit using them to buy goods and services. Instead, use a payment app specifically created for businesses, like Square Cash for Business or PayPal.