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Thursday, October 7, 2021

Avoid Dangers of Using Cash Apps

Most of us use cash apps like Venmo to make payments nowadays, but they’re not always safe.  

Using your smartphone to make payments is getting more common than ever. More than 7 in 10 adults now select Zelle, Venmo, Square, or PayPal to reimburse friends, buy produce at the farmer’s market, or pay the plumber. It’s easier and faster than writing a check, and payments are made instantly - without the fees charged by credit card companies. However, consumers need to be savvy to avoid revealing personal information or becoming targets for fraudsters. 

While the vast majority of transactions are legitimate, complaints about transactions are on the rise and it can be difficult to reach customer service. The best way to protect yourself is to follow good use practices. 

Keeping Yourself Safe With Cash Apps

Regardless of which cash app(s) you use, including Google Pay and Apple Pay on your phone, there are some rules you should follow for every single transaction. 

Stay off public Wi-Fi. If you have a plan with low data, it can be mighty tempting to hook up to public Wi-Fi at the local coffee shop, dentist’s office, library, you name it. Your phone may well be set to automatically connect wherever you have used it in the past. But if you do, hackers can steal your financial information. Stay safe and use your carrier’s network or a separately purchased VPN. 

Stay private. Use privacy settings so no one can learn who your friends and family are and use their names to trick you into sending them money. 

Stay wary of emails asking for information. Never, ever send money in response to an email without verifying the source and circumstances. Hackers are very clever about scaring you into sending cash, and they have no conscience. If you get a threatening letter claiming to be from the IRS, Social Security, or even your bank, ignore it or call to verify. If you get an email requesting personal or banking information, your criminal detection reactors should go on high alert. Ditto for those claiming to be from someone associated with a relative. 

"You have to be worried about your email because that is the number one way they are going to come after you,” says Shane Harris, senior director of product management at Mimecast, an international cybersecurity firm with U.S. headquarters in the Boston area.

And never, ever click on a link in an email; just go directly to the site you need to use. 

Venmo is the app of choice for many small businesses and private users. But reject the urge to add all your Facebook contacts to its address book, although it will ask you to. Add individuals as needed and keep all transactions private by going to Settings and selecting Privacy to view your options. 

Transfers on Venmo are free via the usual “slow” route that takes one to three business days. But be aware that prices just got hiked on the faster “instant” option that will get money to someone in just 30 minutes or less. That now costs 1.5 percent of the transaction, with a minimum of 25 cents and a maximum of $15.

Zelle is owned by a partnership involving 7 of the largest banks. Its claim to fame is that you only need to know a person’s email or cell number to transfer money between accounts. The other nice thing: it’s always free, and the money is there within a few minutes. 

Just remember to check carefully that you are using the correct email address or cell number because you can’t get your money back if you make a mistake.

PayPal has long been used by online sales companies such as eBay and is the oldest online payment service. You can use it internationally, and small businesses can take advantage of an option for their invoicing services. The downside is that PayPal tends to charge excessive fees. International transactions using PayPal or a personal bank account cost a stiff 5%, or 7.9% if you use a credit card.

Cash App (part of Square) is used to transfer money to friends and family, just like Venmo. If you set it up to pay out of a debit card account, then the service is free. But don’t make the mistake of linking it to a credit card, which will set you back 3% per transaction and potentially open you up to scams.