For example, about half of U.S. adults incorrectly believe that they could reverse a payment made through a peer-to-peer platform, according to an AARP survey conducted in November. If you change your mind, have a problem or make a mistake — input the wrong email address or phone number, for instance — you’re usually at the mercy of the recipient.
“The only thing I can do is plead for that person to be ethical and send the money back to me,” Stokes says.
Payment apps usually protect you against unauthorized transactions, but not necessarily against other fraud — and that can be true even if you link to a debit or credit card that otherwise would offer such protections. Many peer-to-peer systems specifically warn people not to pay individuals or businesses they don’t know, Stokes says.
“If you use (a peer-to-peer app) to buy those great-priced tickets off of Craigslist, and you never get those tickets, you’re out the money,” Stokes says.
If you’re doing business with a merchant you don’t know, use a payment app built for such transactions, such as PayPal, which offers dispute resolution and purchase protection.
Lee recommends reviewing an app’s security, fraud and privacy policies before installing. He also recommends using unique, complex passwords, and turning on features, such as facial recognition and passcodes, that could prevent others from accessing your phone. Enable your phone’s “find my device” feature, which lets you erase its data if the phone is lost or stolen.