Person to person payment apps like Venmo and Paypal — also known as P2P apps — have brought a new level of convenience to everyday interpersonal transactions. Unfortunately, like almost any virtual service attached to your bank account, the practice carries security risk.
Some users may have felt they’d be in more secure hands with the introduction of Zelle — a personal money-transferring app connected to a large number of major United States Banks including Chase and Bank of America. Unfortunately, that has not proven to be the case as users have dealt with major fraud issues (via TechCrunch).
Zelle is newer than P2P mainstays like Paypal, but has been instituting large marketing campaigns and may have growth potential, due to certain features that make it stand out. Zelle is connected to some U.S. banks, which means you can use it directly from within many preexisting mobile banking apps. Because of that same tie, it also has faster transfer times, letting customers avoid the multi-day waiting process they’d encounter on Venmo. The money also never waits in possession of a third party.
But if anything, it seems Zelle’s enmeshment with reputable banks has left trusting customers in a lurch. The app does not offer fraud protection, meaning it won’t refund customers who have been conned into voluntarily paying someone for falsely advertised services or products. But despite these risks, some users may opt to choose Zelle in need of a particularly speedy or convenient transaction.
If you do choose to experiment with Zelle, take note of some of our below security tips.
Be Fully Aware Of Risks
Zelle has been reported to have a high incidence of fraud and scam. Linking your sensitive bank information to an app always carries security risk. This is especially true without fraud protection. Be aware of what you’re choosing when you decide to use Zelle.
Only Send Money To People You Know
Zelle doesn’t offer fraud protection because in the eyes of the app, it is not designed for purchases that would require it. If you offered payment to an online vendor through Zelle who then did not deliver on agreed upon goods or services, Zelle would not cover the expense because you voluntary performed the transaction. With these parameters, it’s safest to only use Zelle with confirmed friends, family and members of your community.
Use A Unique Password
This is on all of our security guides, but becomes all the more important when dealing with an application tied to sensitive financial information. It’s vital to use a unique password you’ve never used for another account and won’t use for one in the future. It’s easier to repeat one password across the board, but that heightens your vulnerability. If hackers get that password from one of your accounts, they can then access all the rest. You can also consider using a password manager to ease organization.
[Check out our roundup of the Best Password Managers.]
Make Yourself Aware Of Specific Bank Protocols
Zelle can operate differently from bank to bank. To be fully aware of the ways you’re protected, look into the specific details of your bank. JP Morgan, for example, doesn’t alert customers to new account linkings. Take note of any red flag limitations from your specific financial institution, so you can be aware of what to look out for.
Monitor Bank Activity
Going hand in hand with knowing your bank protocols is keeping track of bank activity in the account linked to your Zelle use. If fraud is a potential issue, you don’t want it continue for extended periods without detection. Keeping regular track of activity in your bank will make sure you can quickly investigate any anomalies.