Peer-to-peer apps come with risks, FTC warns
A high-tech solution to the perennial problem of the friend who never has cash when it comes time to pay for the pizza, peer-to-peer payment systems like Venmo, Square Cash or Google Wallet also can create new problems, according to the Federal Trade Commission.
One is that money may not actually transfer when the app says it does. PayPal Inc., the parent company of Venmo, has agreed to settle an FTC case that included complaints that Venmo would tell customers that money had been credited to their accounts and was available for transfer to an external bank account.
In reality, the company didn’t review the transaction until a customer tried to transfer the money and that could lead to a delay or rejection of their attempt to put the money into a bank account so they could pay rent or other bills.
That delay in verification raises a related issue of scammers appearing to pay for items without sending any money. If you’re accepting a P2P payment for tickets or other merchandise, transfer the payment to a bank account and make sure it clears before shipping anything.
Because a P2P app needs to access your financial information, check to see what security measures it offers and make sure they’re turned on.
Some P2P apps post transaction on social media. If you’re not wild about the whole world knowing how you spend your money, check the app’s social media settings before you use it. The FTC has some other suggestions about securing your personal information.
Brian Bowling is a Tribune-Review staff writer. Reach him at 724-850-1218, [email protected] or via Twitter @TribBrian.