Changing your name may affect your bank account
To protect yourself and your bank account from financial turmoil, follow these tips when changing your name.
america today
If you’ve tried Zelle, Venmo, or PayPal, you’ve probably wondered which payment app is better than the other.
Maybe you’ve ever wondered why you need to use a payment app at all.
Payment apps are very convenient. With just a few clicks on your smartphone, you can pay for a meal out, check out your water bill, or buy a bottle of homemade clover honey at the farmers market.
But we’re talking about money here, and payment apps can attract fraud and fraud.
The internet is full of reviews of the best and most secure payment apps. The simple truth is that no app stands out above the rest.
“They all offer similar services, and no one necessarily stands out,” said Kimberly Palmer, personal finance expert at NerdWallet.
Here’s a quick overview of some of the top payment apps from experts at Consumer Reports, NerdWallet, CNET, and PCMag.
paypal
According to research from The Motley Fool and Pew Research, PayPal is the most popular payment app of all time. PayPal allows you to send money between people and make a wide range of online purchases. You can send money from your bank account or linked card.
Who uses it: Research shows that older Americans use PayPal far more than any other payment app.
Strong Points: PayPal is widely accepted. Often used as a payment option on retailer websites. PayPal has high transfer limits. There are many payment methods.
Cons: PayPal charges “a long list of fees for business transactions,” CNET reports. Transferring money to your bank account may take some time.
Venmo
PayPal owns Venmo, so it may seem redundant. However, the two apps serve different markets. While Venmo is aimed at friends splitting restaurant bills, PayPal is a viable option for purchasing items from merchants.
Who uses it: Venmo is especially popular among young Americans. According to Pew Research, 57% of adults ages 18 to 29 use Venmo, compared to 15% of boomers.
Strong Points: Venmo is the go-to app for many Gen Z and Millennials. Trading limits are high, up to $60,000 per week.
Cons: Information about these transactions is “publicly available by default,” CNET said. Venmo charges fees for credit card transfers and instant transfers to bank accounts.
cell
You’ve probably seen Zelle in the menu of your banking app. This is a remittance service that allows you to send cash directly through your bank account.
Who uses it: Baby boomers and Gen Xers are slightly more likely to use Zelle than other payment apps, according to Pew Research.
Strong Points: Zelle transfers money directly between bank accounts without the use of third-party apps. Transfers typically complete within 1 to 2 minutes.
Cons: You cannot link your credit card to Zelle. There are trading limits per day.
cash app
This app is similar to Venmo. Set up your account and link your card or bank account to send and receive money.
Who uses it: According to Pew Research, Black Americans use Cash App more than any other payment app. Users tend to be younger.
Strong Points: You can buy and sell stocks and Bitcoin using Cash App. The app is easy to use.
Cons: Fees apply for credit card transfers and instant transfers to bank accounts.
Apple Pay/Apple Cash
This service allows Apple users to make transfers and purchases. Works in conjunction with the Apple Wallet app.
Who uses it: Apple user.
Strong Points: Apple Pay is offered at checkout at many retailers. It’s easy to use on your iPhone.
Cons: You must use an Apple device.
Which payment app is best?
Debate rages on about the relative merits of various payment apps.
The banking industry is positive about Zelle. Industry leaders claim that the service is more secure because it is built into banking apps.
“If you have a banking app on your phone, Zelle should be your first choice,” said Paul Benda, executive vice president of risk, fraud and cybersecurity at the American Bankers Association.
In an extensive analysis in 2023, Consumer Reports compared Venmo, Zelle, Cash App, and Apple Cash on safety, privacy, and transparency. Cash App and Apple are highly rated for safety. Apple received the highest score for privacy. No one rated particularly high on transparency.
Payment apps are not as heavily regulated as debit and credit cards, especially when it comes to fraud.
Apps typically provide protection against fraudulent transactions. If a fraudulent payment is “approved,” consumers have fewer options. This usually means a scammer convinced you to send that payment.
Consumer Reports found that apps often collect unnecessary personal data that may be shared with third parties.
“Why are you using that app? Where in your life are you being asked to use that app?” said Lisa Gill, an investigative reporter at Consumer Reports.
However, payment apps are more secure than other alternatives. For example, mailing paper checks is widely discouraged.
Best practices for payment apps
Here are some pro tips for using payment apps safely.
send money to someone you know
The safest way to send money is to someone you’ve sent money to before. If you’re a new recipient, double-check their phone number or app “handle” before sending anything.
One great way to verify your account is by scanning a QR code, a tool that is allowed by most major apps.
Please send a “micropayment” first
If you’re sending money to someone new, start by sending 5 cents or $1. We ask for confirmation of receipt before sending any further funds.
Turn on two-factor authentication
Enable any additional security measures allowed by your payment app. Prevent others from trying to access your account.
Use only the apps you need
The more payment apps you use, the more accounts you need to monitor. Consumer Reports’ Gill says accounts that are rarely used are of particular concern. Scammers target idle accounts.
“You don’t have to open a Venmo account and use it once a year,” she said.
Contributor: Betty Lin-Fisher
