Is It Safe to Use Peer-to-Peer Payments?

Quick Answer

Peer-to-peer payment platforms are generally a safe and quick way to send money to friends and family. But you need to be careful because the transactions can’t always be reversed, which also makes them a favorite for scammers.

QR code payment, customer using peer-to-peer payment on their smartphone for paying at shop

Peer-to-peer payment platforms and apps can be a secure, fast and easy way to send and receive payments, but you want to be aware of the risks. Even if you don't have to worry about the platform itself being hacked, many scammers use these apps to trick people into sending them money. And, if you fall for a scam, you might not be able to get your money back.

What Are Peer-to-Peer Payments?

Peer-to-peer (P2P) payment platforms include apps and services that let you send and receive money directly to or from another person—and sometimes businesses. A few of the most popular P2P platforms are:

Each platform works slightly differently, but they all basically enable the same types of money transfers.

Are Peer-to-Peer Payments Safe?

If you're simply sending money to a family member or reimbursing a friend for your portion of dinner, sending payments through P2P apps is generally a safe and convenient option. But it's always a good idea to be cautious.

Some of these platforms have had data breaches or security shortcomings that led to the exposure of users' personal information and potentially compromised their accounts. However, account security isn't necessarily the thing you need to be worried about the most. Users' funds generally aren't stolen directly out of their accounts—and federal law could require financial institutions to reimburse you for any unauthorized transactions.

The real security concern is that P2P payment apps make it easy to send someone money, but they don't always make it easy to reverse or cancel a transaction. Because of this, criminals can use them to trick victims into transferring funds. And financial institutions might not be required to reimburse you if you fell for a scam and authorized the transfer.

Peer-to-Peer Payment Scams to Avoid

P2P payment scams occur in different ways, and scammers continually test new schemes, but some common scams you'll want to watch out for are:

  • Overpayment scams: Scammers send you money and then claim it was an accident and ask you to send it back. If you send them money, you might find their entire transaction gets reversed a few days later—perhaps because they used a stolen credit card to fund it—but you might not be able to reverse yours.
  • Marketplace scams: You could also be the victim of an overpayment scam (or a fraudulent payment for the correct amount) if you're selling something on an online marketplace. If you're buying an item, adopting a pet or renting an apartment, watch out for sellers who request an upfront payment or deposit via a P2P app.
  • Charity scams: Scammers might set up fake social media profiles or websites and ask you to make charitable donations using a P2P payment to their account.
  • Requests to send money to yourself: A recent scam that's especially prevalent with Zelle is when scammers call or text you about a suspicious transaction or activity and then ask you to send a transfer to yourself to "cancel out" the "fraudulent" charge. In reality, you're sending money to an account that the scammer set up to look like it belongs to you, and your money's gone.
  • Phishing scams: Similarly, scammers might try to trick you into sharing personal information. You could get an email, text or phone call from someone claiming to work for a merchant or the P2P platform itself. Sometimes, they even claim to work for the fraud department. You might be asked to share personal information, verify your account or click on a link to a look-alike website that they control where you'll "log in" to your account. They can then use the information they collect to get into your account or steal your identity.

Although these are popular scams, fraudsters can use P2P payments as a component of almost any common scam. Aside from a few exceptions, the means to transfer the money (gift cards, money orders and cryptocurrency are other scammer favorites) is simply one part of the process.

How to Protect Peer-to-Peer Payments

Learning to identify a scammer by knowing about the telltale signs and common scams is one of the best things you can do to protect yourself from P2P scams and many other types of financial scams. But you can also add a few security measures to your accounts to help keep yourself safe:

  • Use payment protection (when available) for non-personal transactions. Some P2P apps, including Venmo and PayPal, offer payment protections for select purchases. This feature could help you get reimbursed for fraudulent transactions or claims, but the sellers may need to pay a fee on each transaction.
  • Consider linking a credit card to your app. Credit cards generally offer zero liability benefits that can keep you from having to pay for a product or service you don't receive. However, many P2P apps charge you a fee if you want to send money using your credit card rather than directly linking your bank account.
  • Enable multifactor authentication. Adding multifactor authentication to your account can keep someone else out, even if they have your username and password. This limits the potential for someone to break into your account after a data breach or to log in to your account if they trick you into sharing the login information. If you receive an authentication code, such as a code in a text message, never share it with anyone—including someone claiming to work for the company.
  • Don't send money to businesses that only accept P2P payments. Many businesses accept P2P payments as an option, but you should generally be able to choose other types of payments as well. If you can't, that could be a red flag that the business is actually a fraud.
  • Verify the recipient and amount. Although it's not really a scam, you want to verify you're sending money to the correct person and that you're sending the correct amount. Otherwise, you'll have to ask very kindly for the money back. If the other person isn't feeling altruistic or is worried about scams, they might not send you back the money.
  • Add alerts to your accounts. Enabling app notifications and alerts can warn you if someone is using your account without your permission.

If you're worried that you got scammed, reach out to the app's customer service and your connected financial institution immediately. Transactions often can't be reversed, but there may be some exceptions. Additionally, you can file a fraud report with the Federal Trade Commission.

Monitor Your Credit and Identity

Monitoring services can help you track important changes in your credit and notify you if your personal information was leaked online. Although they're reactive by nature, they can be helpful tools and an important part of managing your finances. Experian offers free credit monitoring for your Experian report, and a FICO® Score based on the report. You can also look into paid programs, like