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Payment apps offer a convenient way to send money, but you must take care when using them. Find out how to protect your money when using payment apps.
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Digital payment apps are popular because they’re convenient and easy to use. You’ve probably used at least one payment app to send money to friends and family or to pay for a purchase from a small business. While these mobile apps make it easy to pay others and get paid, it’s essential to protect yourself so you don’t get scammed and give your money to a thief. Below, I’ll outline some recommended best practices to follow when using payment apps.
Don’t keep cash in digital payment apps
When receiving payments through payment apps like Venmo, it’s best to transfer the funds to your bank immediately. Why? Money stored in your mobile payment app isn’t protected like funds kept in a bank account are. That means if something goes wrong, like if the mobile app goes out of business and shuts down, you could lose all the money in your account.
Most bank accounts offer FDIC insurance with protection on up to $250,000 per account, per bank so you can feel confident stashing your cash there. The bank accounts on our best checking accounts list are all FDIC-insured. Don’t treat payment apps like your personal bank account.
Do be cautious of suspicious links
Unfortunately, scammers want to trick people into parting ways with their money. It’s not uncommon for scammers to target unsuspecting people through text messages or email. These messages may include suspicious links, encouraging you to send payment through a website or mobile payment app.
Avoid clicking on any links from people you don’t know because it may direct you to a phishing link intended to steal your private information. If something seems off, trust your gut. If you want to pay someone you know by mobile app, make a payment directly within your favorite payment app — not through a link sent to you by email or text message.
Do protect your accounts
Protecting your online accounts, including mobile payment app accounts like Cash App, is essential. Choose unique passwords that aren’t guessable and set up two-factor authorization to protect yourself and your money better. It’s also recommended that you review payment app transactions and account balances every so often. If you don’t take steps to protect your accounts, it could be easy for a thief to access your online accounts and take your money.
Don’t make payments when connected to public wifi
It’s not a good idea to handle financial transactions, including sending money using one of the best payment apps, while connected to public wifi. Your personal data is at risk when you use unsecured connections. Instead, it’s best to use payment apps when you’re connected to a private, secured internet connection. If not, wait to send money.
Do verify payment details before sending money
Don’t rush to send payments before double-checking the details. If you accidentally send money to the wrong person, you may be unable to reverse the payment and get the money back into your account. It’s best to review all payment details carefully before sending money to someone. This way, the right person receives your money, and you don’t make a costly error you can’t fix.
Take care when using payment apps
Payment apps are a helpful tool that can save time and eliminate the need for cash when paying or collecting money from others. But make sure you use them carefully so your money is safe. For additional money-related tips, check out our free personal finance resources.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Natasha Gabrielle has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.
