It wasn’t long ago that friends and colleagues completed personal transactions through the physical exchange of cash. This changed at the start of the digital age as fewer people carried cash in their wallets and purses. Instead, people now rely on person-to person money transfer apps, such as Venmo and Zelle, to make personal exchanges.
With these being strictly accessible through an app that has direct access to multiple bank accounts, many have wondered how safe the platforms truly are. Generally speaking, they are very secure because the app utilizes encryption to protect every user’s personal information and each transaction. However there are several other risks associated with money transfer apps that aren’t as reliant on the security of the platform but could still put any user’s personal data and banking information at risk.
My Healthcare offers Zelle through the mobile banking app, allowing you to send money to family and friends behind the security and log-in of mobile banking. This adds an additional layer of protection and mitigates some of the potential risks of the stand-alone money transfer apps as indicated below. Learn more about this service here.
The Risk Associated with Losing Your Phone
The primary risk associated with exchanging funds on an app is that a user’s phone is lost or stolen. Once logged into Venmo, for example, the app stays logged in for user convenience. However, this makes it very easy for funds to be stolen if the device falls into the wrong hands. To prevent this, users must always guard their phone as if it were a debit card or cash. Phones should always be password or passcode protected. Users should also consider logging off after using the app so that money can’t be easily extracted from a stolen device.
The Risk Associated with a Stolen Password
Users must also be mindful that the password to their account could fall into the wrong hands. If this happens, criminals wouldn’t need the user’s device to access their account. Users should protect their account with a unique password that is easy for them to remember but difficult for others to guess. Users should also set up multi-factor authentication. This ensures that criminals still can’t access the account even if they’ve stolen the password.
The Risk Associated with Sending Money to the Wrong Person
Money that is sent to unverified accounts that don’t provide promised products or services may not be retrievable. Users must be mindful of the people they send funds to and verify the exact username of the recipient before ever hitting send. Some apps also have security measures set in place to help users avoid sending money to people they haven’t had previous exchanges with or aren’t listed as friends. It is recommended that users who are skeptical of this transaction process to consider other methods such as PayPal. Unlike PayPal, Venmo doesn’t offer payment protection for transactions made within the app.