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Are Money Transfer Apps Safe?

By Melissa Green | Citizens Bank Staff

Peer-to-peer payments (P2P) make splitting tabs and bills with friends easy and convenient. Money transfer apps — like Zelle®, Venmo©, PayPal©, and Google Pay™ — allow users to send money from their mobile devices through a linked funding source.

Here’s what you should know about how P2P apps work, and how to use them safely.

How do money transfer apps work?

Let’s say you need to give your sister money for your parents’ anniversary gift. You would simply open your app, select “little sister” from your contacts, and enter the amount you want to send. Within a few moments she’ll get a notification that you’ve finally fulfilled your financial obligation. Your sister can leave the money in the app, or transfer it to her bank account.

P2P payment services are available through banks, credit unions, and social media networks, including Facebook. If the person receiving money doesn’t have the app they may receive a text or email notification with instructions to download the app and collect their money.

Are money transfer apps safe?

Money transfer apps are safe, but they’re not foolproof. If you’ve ever texted or called the wrong number, that mistake could cost you when sending money. It’s important to understand that you may not get that money back. In most cases, providers won't help if the recipient refuses to return the misdirected funds. A good rule of thumb, only send money to people you know and trust.

The law doesn’t require P2P services to return or help recover the funds.

All apps aren’t created equal — they’ll have varying security measures in place to help prevent honest mistakes and dishonest fraud. It’s important to do your research before choosing an app.

How can I protect myself when sending money?

While “quick and easy” is the basic premise for P2P, taking a few extra seconds to enable security features can save you a lot of stress and money. Here are a few things you can do to help keep your cash exactly where it’s supposed to be.

  • Enable additional security settings: Many apps will default to the lowest security settings, which means if someone has your phone they may be able to send money to anyone without being asked for a pin, fingerprint, or password.
  • Only send money to people in your contacts: It’s alarmingly easy to mistype a phone number or email address, which can be a costly mistake when sending money. Instead of manually typing, choose numbers and email addresses already stored in your contacts. This way, you’re only sending money to people you know and trust.
  • Double-check the recipient’s info: Before you press send, confirm the username, phone number, photo, or other identifier. Some platforms offer to send a special code to confirm that the person you’re sending money to is your intended recipient.
  • Turn notifications on: Some platforms do this automatically; if not, go to the app’s settings and turn on notifications. You’ll get an email or text any time there’s a transaction on your account.

What to remember

Money transfer apps are a great way to simplify your life — as long as you use them safely. It’s important to do some research and find an app that you trust. Your bank may offer Zelle within your online banking or mobile app so you may not need to download anything else. Unfortunately, fraud happens, so do your best to safeguard yourself and your personal information when sending and receiving money.

More information

Want to quickly and easily send and receive money with people you trust? You can enroll in Zelle by downloading the Citizens Bank mobile app or enrolling in online banking.

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