Mobile payment apps make it easier than ever to send and receive money from people and businesses. Digital wallets, debit cards and bank accounts give you quick access to your funds from anywhere in the world.

The convenience offered by mobile payment apps is undeniable. There’s no longer a reason to split checks and divvy out cash for shared bills or tabs. Everyone can transfer the exact amount they owe directly to the person who picks up the check.

Mobile payment solutions offer an incredible amount of convenience. However, it’s essential to understand the risks and take appropriate precautions. As with any means of transferring money, criminals will look for ways to get their hands on stolen funds. To keep your money safe, take a few moments to brush up on your mobile payment knowledge.

What are the most popular mobile payment apps?

There are several ways to make and receive payments from your smartphone. For instance, many retailers offer near-field communication (NFC) options at the point of sale. All you have to do is hold your phone near the sensor, and the funds transfer automatically.

Still, when it comes to person-to-person transactions, you’re more likely to use an app such as:

• Zelle
• Apple Pay
• Google Pay
• Venmo
• Square Cash

With each of these apps, you can pull money directly from a bank account or debit card to send to other people. Likewise, you can accept payments from anyone else within the app. With a few taps, the money will arrive in your bank account, either instantly or in a few days depending on your willingness to pay transfer fees.

The following tips can apply to many mobile payment apps, including options not listed above.

How to spot common mobile payment scams

Where there’s money in motion, there’s often someone trying to gain access to funds. Often in the form of social engineering or confidence schemes, fraudsters target digital money transfers because it’s easier to hide their identity while gaining your trust. This is often the case with online scams where criminals either pretend to be someone else or hide their true intentions. Scammers also target digital money transfers because it’s challenging to have the transactions reversed. When money leaves your account and goes into another account, it’s gone. In some instances, your bank or credit union may attempt to retrieve these funds on your behalf. However, you’re typically out of luck. Similarly, if you accidentally send the funds to the wrong person, these mobile payment apps and financial institutions will not be able to recover the funds for you.

Here are a couple of examples of mobile payment scams to look out for:

The accidental overpayment scam

This scam usually targets people who are selling items online. For instance, if you put your furniture up for sale online, a fraudster might contact you and offer to send you a check. When the check comes, it is for more than the agreed-upon price.

Subsequently, the fraudster will then contact you to say they’ve made a mistake. Of course, by this time, you may have already deposited the funds into your account, or the scammer will tell you it’s ok to deposit the funds if you send back the “extra” money. After you refund the money, your bank contacts you to say the check was never real, and now your account is overdrawn.

Your mobile check deposit typically takes 1-2 business days for the funds to become available in your account. However, it often takes many more days⁠—possibly weeks⁠—to determine if a check is fraudulent and subsequently return the check and charge your account. It’s important to know that uncovering check fraud⁠ will result in the removal of the fraudulent funds from the account—even if the funds have already been deposited into and withdrawn from your account. That means that if you transferred or spent the fraudulent funds that your money covers the difference. If your account balance does not cover the full amount, you could owe the bank money. Once you willingly send money to a scammer, it can be challenging to get your money back.

The overpayment scam is just one common form of “fake check scams”. You can learn more about different types of fake check scams and how to avoid them from the Federal Trade Commission.

The convenience scam

In this scam, the fraudster gains your trust either during a single conversation or through repeated contacts. When a deal is made, the fraudster will say they want to help you save time by simply logging into your mobile banking account and depositing the check on your behalf. They will tell you this option will be “quicker”, or try to take advantage of you for not being familiar with digital banking technology.

Of course, once the fraudster has access to your account, they’ll likely initialize a transfer into their account or attempt to siphon your funds in some other way. If you do not have funds worth stealing, they may use your account to scam other people out of money with another mobile payment scheme—this can help them appear legitimate and trustworthy to another victim while also covering their tracks.

Ultimately, the main lesson is to never give anyone your banking login credentials for any reason and do not conduct transactions on anyone else’s behalf. Ever.

How to accept mobile payments from those you know and trust

Receiving money from your contacts is straightforward. Apps like Square Cash even allow you to request a specific amount from other people. For example, if you pick up the full balance on a shared expense, you could send your friend a request for the exact price of their part.

Once your friend reviews and accepts your request, the money will move from their account into your app’s wallet. You can use this money to pay other people and businesses or transfer it into your bank account. Some apps charge a small fee for instant transfers, but if you don’t need the funds immediately, you can often make the transfer for free and the money will take a few days to reach your account. Zelle is one option that does not charge a fee for sending or receiving funds, nor does it charge a fee for instant cash transfers to your bank account or debit card.

How to safely accept mobile payments from strangers

You don’t need to know someone to accept money from them through an app. If you can find their username within the app, you can send and receive money just like you can with your regular contacts. It’s essential that you know that you’re sending the money to the right person—it’s best to confirm with the contact that their username is the correct one.

If you want to accept credit card payments at your next yard sale, you’ll need a card reader that attaches to your smartphone. Buyers may feel more comfortable buying from you if you give them a credit card option. Credit cards offer much better fraud protection than debit cards and written checks, so there’s less to worry about for you and the buyer. You should note that some apps take a small fee for processing credit card transactions, usually between 2.75% and 3%.

Scams are typically well rehearsed and can feel like an honest mistake, or a legitimate and reasonable request. Fraudsters use emotional triggers to manipulate our actions and trick people into trusting the wrong person. Mobile payment apps can make your life easier if you understand how to identify common scams. If you’re ever in doubt about someone’s sincerity when exchanging goods and services for money, it’s best to be cautious. Ask someone you trust to examine the situation—consider calling your local credit union.

Visit our resource center to learn more about how to protect your finances and personal information.