What most people don’t know about Venmo, Zelle & Cash App


It’s fast and convenient – want to send money to a friend and don’t have cash on hand? It’s simple as a text message! This is now possible with peer-to-peer money apps such as Venmo, Cash App, Zelle, Apple and Google Pay and the list of popular apps keeps growing. What most people don’t know is that the providers of these convenient services are not banks or credit card companies. They do not offer the same level of protection against scammers, which has made them a perfect tool for criminals to take your money and get away with it.

The Takeaway

Zelle warns it’s users to “only sent money to people they know and trust, treat it like cash and beware of too-good-to-be-true situations.” Well, that’s about as obvious as KFC telling us that fried chicken may not be good for your health. Here’s some real world guidance:

  1. See it as cash If you see these peer-to-peer apps as cash, you’ll make different assumptions about using them. There is no way to recover that money or no level of consumer protection, period.

  2. Not to be used for business purposes The terms of service for most apps prohibit using them for purchasing goods and services. Look instead for a payment app specifically created for business users, like Square Cash for Business or PayPal. If you’re being asked to send money via peer-to-peer app to a business you have little familiarity with, it might be a scam.

  3. Seeing is believing Scammers have become experts at manipulating people. Peer-to-peer payment requests have skyrocketed on Facebook Marketplace, Craigslist and apartment rental sites. Beware of sellers requesting payment before showing you what they are selling, be it a puppy, bike or car. That’s a big red flag that it’s a scam.

Remember, scammers know that there is no way for you to get your money back. The convenience peer-to-peer payment apps offer comes with significant risk. Use your head and be skeptical.

Stay safe out there.

-A

PS. I recently did an interview on Think Tech where we talked about scammers and the new Apple M1 chip. Check it out!