Banking Tip of The Month: The Truth Behind Third-Party Banking Apps: How Safe Are They?
Over the last decade, cash has seen a rapid drop in popularity. Carrying cash was becoming an uncommon habit even during the years preceding the pandemic.
Cash has its benefits, though. It is a convenient way to pay for goods and services without directly involving your bank or credit card company. Cash can also be kept handy for an unlimited amount of time.
Third-party banking apps that make paying others (and not having to use cash) have skyrocketed in use to facilitate these conveniences in a post-cash society. These apps often let you send money to friends, request funds, and transfer money to small businesses as payment for purchases.
Today, we look at some of the most common third-party banking apps you may have on your phone and how securely they handle your money. And while you’ll learn about several options that are available to freely use, keep in mind at Dream First Bank you can use Zelle, which provides the same convenient payment options, but with one big advantage - if you have a problem or need support you can call us and we’re here to help!
Cash App is one of the most popular banking apps on the market. It attempts to stand out from the crowd by appearing like a fully digital bank; it can even carry the functionality to accept direct deposits. However, like any other payment app, you still need a fully established bank account to utilize the offered functions.
Cash App promises to encrypt all data in transit and claims a high level of compliance with federal security standards for digital data. It also permits users to add security features onto the login screen for the app itself, such as Touch ID, so that anyone who gets their hands on your phone won’t have immediate access to your money.
However, it is critical to note that payments, once sent, cannot be canceled. With digital scams constantly circulating, users must know where they send their money. Additionally, the balance on your Cash App is not federally insured, so users risk having their money taken in the event of a cybersecurity breach on the company’s part.
Among small business owners and sellers, Paypal is a commonly used app. It offers Seller Protection to merchants, which keeps an eye out for false claims and chargebacks. This provides peace of mind to sellers who may never directly interact with their customers by offering them protection against would-be thieves. It also uses 128-bit encryption on all transaction data.
Buyers also enjoy Paypal for many of the same reasons that make Cash App popular. In the same way Seller Protection guards against fraud, Paypal’s Purchase Protection program shields consumers from scams. If a purchase made via Paypal doesn’t show up in the promised condition or fails to show up at all, customers may get a full refund from Paypal. Since it is such a popular platform, some scammers like to pretend to be Paypal themselves to get access to your sensitive information. Therefore, users should be cautious of any communications from Paypal that don’t align with company standards of professionalism or specificity.
Venmo is yet another money transfer app enjoyed by millions. Users can send, receive, and request funds from their friends and family like its direct competitors. However, it has a less robust system for supporting business transactions than some other apps on the market. Still, Venmo encrypts its user data and offers robust user security features that keep accounts safe.
As mentioned above, Dream First Bank is proud to offer our customers free access to Zelle. As with Cash App, PayPal, and Venmo, Zelle is a great way to send money and accept payments from anyone. The main difference is that if you have any issues, the bank is here to help! We’ve posted an article all about Zelle for you to check out (in case you missed it).
Make Banking Easy
Whether you want to sell some old books online, pick up the tab for coffee with your parents, or finalize a business transaction, plenty of third-party banking apps want your business. So pay attention to the security features of your app of choice, and keep a lookout for thieves and scammers.
For more helpful tips on financial wellness from the team at Dream First Bank, be sure to check out our Blog and read some of our other blog posts.