The Pros and Cons of Peer-to-Peer Payment Apps

Peer-to-peer payment apps, or P2P apps, are a convenient way to share funds with people but come with some identity risks.

It might be a friend who bought those Taylor Swift concert tickets for your kid’s birthday present on your behalf, someone who owes you money for picking up the tab at lunch last week, or even a way to conduct business transactions like selling a piece of furniture or handmade crafts. One of the increasingly popular uses for peer-to-peer payment apps is when multiple people have to “chip in” to pay for a single item, like a hotel room, cruise ship cabin, or baby shower gift for a co-worker.

Though convenient, peer-to-peer platforms have been scrutinized for their potential security concerns. As a platform that is connected to some type of payment account, they’re a golden ticket for hackers. When you create your account on a peer-to-peer site, you will link a credit card, debit card, or bank account in order to deposit and withdraw funds; if a hacker gains access to your peer-to-peer account, they have access to a more serious form of your finances.

If you plan to take advantage of this handy payment method, you’ve got to use some precautions. The very first is your password security, which is always a good idea. Whether it’s an app account, your email account, or any other online portal, a strong and unique password is a must. A strong password contains a lengthy combination of uppercase letters, lowercase letters, numbers, and symbols, typically between eight and twelve characters in length. A unique password means that you don’t use it on other sites, no matter how tempting that may be.

Once your account is secured with a strong, unique password, it’s important to monitor all activity in case someone still manages to get in. You can set up transaction alerts to let you know right away if your account has been used, and you can schedule some time to log in and take a quick look each week. If you see activity that you don’t recognize, report it immediately. Deposits you weren’t expecting, not just withdrawals or purchases, can still be a sign that someone is in your account.

Contact the Identity Theft Resource Center for toll-free, no-cost assistance at (888) 400-5530.