6 Ways to Avoid Scams While Using Payment Apps

Payment apps are one of those futuristic modern conveniences that many of us have come to rely on. By using them, you can pay for goods or services, donate to your friend's fundraising efforts, or even pay your rent. I've been lucky enough to be able to pay mine this way for several years now, and it beats the pants off mailing a check.

Some big names in the payments apps space you've likely heard of include PayPal, Zelle, Venmo, and Cash App. You link your checking account or credit card to your account in the app to make payments, and to transfer money out when you get paid.

Unfortunately, payment apps also offer scammers the chance to rip you off. They make it extremely easy to send someone money, but if you send it to the wrong person, it might be difficult to reverse or cancel the transaction. And if you were taken in by a scammer impersonating someone you know or an entity you do business with, your bank may not be able to get your money back if you willingly authorized the payment. Here are six ways to keep your money safe when you use payment apps.

1. Only use them to pay/get paid by people you know

To stay safe, only use payment apps with people you know. For example, if you go out to dinner with friends and someone puts the meal on their credit card and requests that everyone else chip in, this is a great time to use a payment app to send your cut of the bill.

An example of when not to send money through a payment app is when a stranger messages you that you've won a sweepstakes prize and must pay some fees to collect your winnings. Stop and think: Did you enter such a contest? This could also come in the form of a stranger sending you a payment and claiming it was an accident. They'll request that you send the money back, but it may have been stolen to begin with, exposing you to trouble. If you get a weird payment from a stranger, contact customer service for the app.

Beware of anyone you don't know requesting payment through an app. Remember when we were kids and were told not to talk to strangers? Dust off that bit of wisdom and keep it front of mind when using payment apps.

2. Make sure you have the right contact info

Along with ensuring that you're only paying someone you know, it's also a good idea to double check that you have the right information for them. If you accidentally transpose two numbers in a phone number, or mistype a user name, you could pay the wrong person.

3. Verify any unexpected requests you receive from someone you know

Scammers can "spoof" a phone number or email address and pretend to be someone you know, in dire need of cash now. Let's say you receive a message through the app from a friend saying they're stranded in a foreign country and can't afford to fly home unless you send them money.

Rather than immediately replying with a transfer of cash, reach out to your friend outside the app to confirm the story. They could end up being quite surprised by the lie being told about them by a random scammer in a payment app, and you won't have to dip into your savings account to help a friend.

4. Don't click suspicious links purporting to be sent by the app company

Phishing scams can easily be deployed via payment apps. A scammer might text or email you a link to click, and tell you that your account has been suspended or locked. If you click that link and provide your login information, that scammer now has access to your account. If you are concerned about your account, don't check up on it via a suspicious link. Instead, log in to the real website or app and check from there.

5. Enable safety features in the app

Mobile apps roll out security updates all the time, so it's important to update the app whenever a new version comes out. Similarly, you can often opt-in for multi-factor authentication for signing into your account, which is a great way to ensure that only you have access to the payment data contained there. And you might want to turn on app notifications too, so you can have an early warning when there's unfamiliar activity on your account.

6. Consider using a credit card if possible

Some apps might give you the option to use a credit card to make payments, and since credit cards offer such robust customer protections, this is a good idea. But note that some apps may charge a fee for using a credit card, so greater security could cost you extra.

If you're the victim of a scam on a payment app (or someone attempts to con you, but you don't fall for it), report the incident to the app company itself, as well as to the Federal Trade Commission. Use caution when paying someone or receiving money, and keep your wits about you, so you don't fall victim to scammers.