Mobile payment apps like PayPal and Venmo could expose consumers to coronavirus-related scams, according to AARP, an advocacy group for older Americans.
Peer-to-peer payment platforms, which allow for the digital transfer of money from one user to another, have risen in popularity, especially among younger adults.
These programs — other examples include Zelle, Square, Apple Pay and Google Pay — allow for a convenient way to transact. But they also pose a fraud threat due to the difficulty of recovering funds sent via the platforms, according to AARP.
Many Americans misuse or have a poor understanding of the platforms, according to AARP.
More than half of Americans believe they can reclaim money sent in error, for example, according to an AARP survey of 2,842 adults ages 18 and over. Many also send money to people they don’t know — a surefire way to get scammed, according to the group.
More than 70% of Americans use the technology, according to AARP’s survey.
The vulnerabilities to scams are especially salient as more people are using payment apps for delivery services for groceries, meals or other necessities as they stay home during the coronavirus pandemic, AARP warned.
It also comes as fraud related to Covid-19 is on the rise. Americans lost at least $13.4 million to such scams from the beginning of the year through mid-April, according to the Federal Trade Commission.
The Electronic Transactions Association, a trade group representing peer-to-peer payment firms, didn’t immediately respond to a request for comment.
”We know scammers are already capitalizing on anxieties and fears around coronavirus,” said Kathy Stokes, AARP’s director of fraud prevention programs. “With so many people at home, consumers should be alert for possible scams on peer-to-peer payment platforms.”
“It is crucial for people to know how these platforms work and sending money to someone you don’t know presents significant risk,” she said.