By Jane Young
If you are not already using a service to transfer money between friends and family, you have probably been invited to create an account to transfer money. Mobile Peer to Peer(P2P) payment services are an easy and inexpensive way to transfer money between people who know each other. Typically, the application allows you to create a profile that is linked to your bank account or credit card. Once your account is established you can locate another person on the app, or invite them to create an account, and transfer money into their account.
P2P payment services are frequently used to split a restaurant bill or travel expenses, pay for work done around the house, pay a landlord or transfer money to children. The most frequently used services, listed below, are generally considered safe.
When you process a transfer with a P2P app you need to be especially careful to accurately enter the recipient’s information. The transfer is like cash, once it is transferred it is gone. If you send money to the wrong account, you have no recourse to get it back. After you make a transfer verify the transaction in your bank account. Limit transfers to people you know and do not use P2P apps for business - use a service like PayPal for business. Avoid using your P2P app on a public Wi-Fi where hackers may try to access your financial data and be on the alert for e-mail scams.
Consumer Reports and USA Today have recently conducted in-depth reviews on the top P2P payment services including Venmo, Zelle (standalone), Apple Pay, Cash App and Facebook Pay. Consumer Reports rated each of the five services as good enough to use. In addition to the apps listed above, USA Today also reviewed Google pay and PayPal Mobile Cash and gave them all passing grades of B or higher with exception to Venmo which was given a D. They stated that Venmo, which is owned by PayPal, does not respect the privacy rights of its customers because their default setting allows transactions to be viewed by the public.
USA Today found that Cash App, by square, was easy to use but had poor customer service. USA Today also reported that Venmo, PayPal and Zelle shared data with third parties.
Apple Pay received high marks in both reviews but is limited to use on the Apple platform.Consumer Reports gave Venmo and Zelle, an acceptable but below average rating on data security and privacy because they did a poor job of explaining how they protect user data. Additionally, Zelle, which is owed by a consortium of major U.S. banks, did not have enough safeguards to prevent transfers to the wrong person. Subsequently, Zelle added a message asking senders to confirm the recipient before sending money. They also added an alert when an attempt is made to transfer money to someone who is not in your contact list.