Use Payments Apps? Be Very Careful With This

Welcome to the year 2024. Video calls are finally a reality, you can have nearly anything delivered to your house in just a few days (and sometimes on the same day), and we can move money around without even handling it as cash.

Payments apps link to your bank accounts and credit cards, letting you send money to other people, make purchases, and shift cash between different banks. They're easy to use and incredibly convenient. But if you use them, it pays to be careful about what you put in that memo line.

Now is not the time to be funny

Payments apps like Venmo have leaned into the "social" aspect of sending money to a friend, and allow users to type fun notes and use emojis in the memo line when they pay others. Your transactions are also public by default, meaning any users on the app can see them. This might seem like harmless fun, and most of the time, it probably is. But it's worth reviewing your use of any payments app and considering what information you're including when you send money, as your relationships and living situation could become public knowledge in a way you might not want.

Speaking of that memo line, if you're inclined to joke around and indicate that you might be paying for something that is legally questionable, you might find your payments getting flagged by the app or your bank. Banking regulations are no joke, and banks can face serious fines for letting illegal transactions slip through. If the payments app or your bank suspects that you're making transactions that involve terrorism, illegal drugs, or sanctioned countries, you might face a headache to untangle the problem. So resist the urge to type "drug money" or something similarly suspect in the memo line.

Safety tips for using payments apps

Payments apps could also open you up to fraud and money loss if you're not careful. Here are a few other tips for using them safely.

• Only pay people you know: Venmo and similar apps are great for sending money to friends and family, but less ideal for paying a stranger. If you order something online and make a payment via an app, then it never arrives, you're less protected than you would be if you used, say, a credit card.
• Take your time: It only takes a few minutes to review payment information (including the bank account you've selected and the person you're paying), and it's worth taking this extra bit of time to be careful. You don't want to accidentally pay the wrong person or overdraft your checking account.
• Don't store money in the app: Cash left in a payments app might not be subject to FDIC protection, so if someone pays you, transfer that money to your bank account as soon as you can.
• Use secure passwords: I hope you're not using the same password for all your accounts! Create unique and secure passwords for payments apps and consider enabling multi-factor authentication as well. Receiving and inputting a code from a text message might take a moment, but the extra security is worth it.
• Report possible fraud: If you do suspect fraud, report it to the payments app as well as the Federal Trade Commission.

Payments apps like Venmo, PayPal, and Zelle offer a convenient way to pay and get paid. Just be careful about what you type in the memo line to avoid having your transaction flagged, and always use common sense to keep your money safe from scammers.