Navigating Peer-to-Peer Payment Apps (Zelle, PayPal, Venmo, etc.): The good, the bad, and the ugly.

P2P payment appsPhoto by Rami Al-zayat on Unsplash

Peer-to-peer (P2P) payment applications have become indispensable tools for simplifying our financial lives. Whether you’re sharing a restaurant bill or paying for that Airbnb stay, most of us can agree these apps are convenient and easy to use. However, as with any technology, there are potential pitfalls, so consider protecting yourself from being defrauded and losing money. Below is a summary of considerations to help you avoid being harmed by scammers using the applications.

The Good:

  1. Variety of Choices: With numerous P2P apps available, you have the freedom to choose the one that best fits your specific needs and preferences.
  2. Robust Security Measures: P2P apps prioritize security, using advanced encryption and security features to protect your financial data.
  3. Cost-Effective: Most P2P transactions are free, making these apps an economical way to manage your finances.

The Bad and Ugly:

  1. Scams and Fraud:  The ease of use of the P2P makes it easy to exploit and to be used for fraudulent activities. To stay safe, only transact with people you trust or have vetted, and avoid sharing sensitive information or using the application unless you are sure you are sending money to someone whom you know. If you are paying someone you don’t know or just started doing business with, pay by credit card or check.  You can cancel a check, and there are certain protections when paying with a credit card if you meet the criteria under federal law.
  2. Complex Terms and Conditions: P2P apps often come with lengthy user agreements. Take the time to read and understand the fine print to avoid unpleasant surprises later, and consider saving the terms and conditions as they are updated.  You want to have a copy of what you agreed to should you have a dispute later.
  3. Privacy Concerns: Mismanagement of your data can lead to privacy breaches. Review app permissions and settings to protect your personal information.
  4. Security Breaches: P2P apps can be vulnerable to security breaches, allowing someone to steal your money or personal information. Make sure you use the extra security measures the applications provide; see suggestions below.

Tips when using P2P Apps:

  1. Choose Reputable Apps: Stick to well-established P2P apps with strong security measures. Research and read reviews to determine their reliability.
  2. Secure Your Account: Utilize strong, unique passwords and enable two-factor authentication for added security.
  3. Only Transact with Trusted Contacts: Avoid sending money to individuals you do not know. Verify the recipient’s identity before completing a transaction.  Look up a business’s registration record and location and, if local, consider making payment at its office. Make sure the email address is a business email address, not a Gmail or Yahoo account.
  4. Keep Your App Updated: Regularly update the P2P app to ensure you have the latest security patches and features.
  5. Regularly Review Transactions: Keep an eye on your transaction history to detect any unauthorized or unusual activity.
  6. Privacy Settings: Adjust app settings to limit the amount of personal information shared with others.
  7. Use a Separate Account for P2P: Consider setting up a separate bank account for P2P transactions to isolate your finances.

Here are a few more internet safety tips to help avoid being scammed:

  1. Strong Passwords: Create unique, complex passwords for all your online accounts and consider using a reliable password manager.
  2. Two-Factor Authentication (2FA): Enable 2FA wherever possible to add an extra layer of security.
  3. Beware of Phishing: Be cautious of unsolicited emails, texts, and messages requesting personal information. Verify the source before responding. I know I have been getting a lot more recently relative to McAfee, and it is best not to respond and to delete, but first forward the email to federal agencies that investigate these frauds. See where to report at the bottom of this article.
  4. Secure Your Wi-Fi: Use strong encryption on your home network and change default router passwords.
  5. Regular Updates: Keep your operating system, software, and security applications up to date.
  6. Privacy Settings: Review and adjust the privacy settings on your social media profiles and apps to limit the amount of personal information exposed.
  7. Backup Data: Regularly back up important data on your phone and computer to protect against loss due to cyberattacks.

More guidance from the Federal Trade Commission:

  1. For further guidance, Federal Trade Commission (FTC): Visit the FTC’s page on P2P payment apps:
  1. Federal Trade Commission (FTC): How to Report Phishing Emails:
  • If you get a phishing email, forward it to the Anti-Phishing Working Group at
  • If you receive a phishing text message, forward it to SPAM (7726).
  • File a Report of the phishing attempt to the FTC at

We hope you found the information helpful. Keep Safe!

The information provided does not, and is not intended to, constitute legal advice; all information is for general informational purposes only. This information may not constitute the most up-to-date information. The links provided are only for the reader’s convenience; A. Ferraris Law, PLLC, and its members do not endorse the contents of the third-party references.  

Copyright©2023, A. Ferraris Law, PLLC. All Rights Reserved.

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