Everything You Need to Know About Peer-to-Peer Payments
If you use Venmo, Cash App or other peer-to-peer payment services, it’s a good idea to know exactly what that means. Peer-to-peer (P2P) payments are convenient and easy, making it a snap to split payments at restaurants or pay a friend back when they pick up some groceries for you. Of course, any time you link your bank or credit card information to an app, there’s a risk of fraud and identity theft. Read on for some tips from Emory Alliance Credit Union before using peer-to-peer payments in Atlanta, GA.
How it works
You might already use one or more P2P payment services. If not, here’s a simple overview: when you sign up for the service, you link your credit card, debit card or bank account number. Your friends can find you through your user ID, which is often tied to an email address, phone number or both. When you want to send cash to a friend, you open an app, find their username and input how much you want to send. The money is deducted from your account or charged to your credit card, and they receive a notification.
Often, transactions involving credit cards include an additional fee. You can also send “payment requests” to friends to invoice them. Once the money is exchanged, you can leave it in your account for future transactions, or transfer it to your bank account. This usually takes a day or two, although some apps offer instant transfer for a small fee.
The risks involved
When you use a P2P payment system, it’s easy to make mistakes. Although the systems are encrypted to prevent hacking, their quick and easy transfers make it difficult to get your money back when you make a mistake or have noticed a fraudulent transfer. In short, consumer protections for P2P apps are minimal compared to those associated with using credit cards, debit cards or even writing out an old-fashioned check.
Furthermore, if someone sets up an account using your friend’s number or other information, you could be sending money to the wrong person, with little chance of getting it back.
Protect yourself with these tips
Here are some other tips to help you protect your account during P2P transactions:
- Add a PIN to your account: Personal identification numbers and two-factor authentication are good ways to increase your account security. If your app offers them, utilize both for maximum protection.
- Check your bank statements often: Always check your bank statements to ensure that there haven’t been any unauthorized transactions. The faster you spot an error, the more likely you’ll be able to get help.
- Confirm with friends that you have the right account: Enter payment information very carefully, and confirm with your friend that you have the right account name. Otherwise, you could be sending money to a stranger.
- Set use limits: If your app allows you to set usage limits, take advantage of that—it might help prevent major unauthorized transactions.
Staying on top of your P2P payments in Atlanta, GA will ensure that your bank account stays flush.
Emory Alliance Credit Union is a full-service financial institution. Call today to see how we can help you.
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