Tips to Avoid Mobile Payment App Scams

Mobile payment apps are more common than ever. It can be a convenient and instant way to send and receive money from your smartphone. We are more likely to send money to family, friends, and strangers through a payment app on our mobile phones than write a check. Mobile payment apps such as Venmo, Apple Pay, PayPal, and Cash App are handy and quick when it comes to online money transfers. It is convenient, fast, easy to use, and for some, the best way for a contactless transaction during the pandemic. Yet, regarding safety, there is a growing concern among consumers and mobile payment companies.

According to the Consumer Federation of America (CFA), mobile payment apps have had three to four times as high fraud rates as traditional payment gateways such as debit and credit cards, despite consumers' attraction and benefits from instant payments and the universal availability of person-to-person payments (P2P). The facility to send and receive money swiftly is already being exploited by scammers. Furthermore, the speed of these transactions makes it difficult to detect fraudulent payments effectively. Many companies that offer peer-to-peer payment services rarely reveal the fraud rate, making it difficult to know just how widespread the scam is and how many of their users’ suffered losses.

Also Read: Worried about your credit card details being stolen online? Here are some ways you can minimize the risk.

Mobile payment apps are an attractive target for scammers since, as customers, we do not get the same fraud protection as we do with our debit and credit cards. In some instances of mobile payment fraud, scammers may link stolen credit cards to payment apps, set up transactions and cancel them before they are completed, or email the original cardholder regarding an overpayment for a product that would be reimbursed. No matter which mobile payment app you choose, we would recommend taking the following steps to avoid mobile payment app scams:

  • Make payments only to people you know and ensure you have their correct phone number or email address before completing the transaction.
  • Do not send a payment to claim a prize online, as they are nothing but scammers luring users into sending payments.
  • Enable multi-factor authentication on your mobile payment app and smartphone that requires a fingerprint, PIN, or facial recognition.
  • If you get an unexpected payment request from someone you know, call them, and verify if the request is genuine and not from a scammer who somehow gained access to their account.
  • Do not divulge your account number to anyone who contacts you for payments.
  • Before sending money, double-check the recipients’ details to ensure you’re transferring money to the right person.

Besides hundreds of mobile payment apps, banks have also integrated online payments and started offering free money transfers to their service offerings. Banks have started to offer free money transfer services. You can always rely on your bank app if you are not sure about sending a payment with mobile payment apps. Most bank apps require both parties to have an account with that or another bank. If you find an unauthorized payment or think you paid a scammer, report it to the respective mobile payment app.

Another payment option available to you is a wire transfer. Today, most banks allow payers to initiate a wire transfer online without visiting the bank. However, receiving payment using a wire transfer will require you to share your bank details with your payer, including your bank routing and account numbers. Wire transfers come with an additional cost, with fees reaching as high as $30; check with your bank for specific details about wire transfers.

Also Read:

Getting Rid of Your Old Stuff Online? Here is How to Avoid Getting Scammed

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