3 Ways to Stay Safe While Using P2P Payment AppsFiguring out how to split the dinner bill is a problem that has plagued social outings for years. Luckily, peer-to-peer (or P2P) payment apps like Venmo, Square Cash and even Facebook Messenger let you quickly and easily send and receive money to or from your friends using your bank account or credit card. There’s no doubt that these apps are convenient to use, but are they safe and reliable? Could they potentially give criminals another route to access your finances? Before you make that next Venmo payment, read our tips to keep your money safe while using P2P payment apps.

Take advantage of every security feature

Most P2P payment apps have multiple security features users can take advantage of, but many of these features are turned off by default to make payments faster and more convenient. Though it may add a minute or two to your transactions, you should enable these features to make sure your account is as secure as possible. For example, both Venmo and Square Cash let you add a PIN number or fingerprint identification to your login. Enabling this will make it so if someone steals your phone, they’ll have to get through an extra layer of security to access your transactions or drain your account balance. Likewise, taking advantage of two-factor authentication so the app requires you to enter a texted security code whenever you make a payment will keep your account safer from remote hacking. On top of that, turning on text and email notifications for all account activity will let you catch fraudulent transactions in the act if your account is ever compromised. Finally, for Venmo and other apps with a social element, changing your feed setting from public to private will keep strangers from spying on your transaction history and friends list.

Don’t carry a balance

Many of the popular P2P payment apps let you keep some money within the service to spend later, like a digital wallet. While this may seem convenient, keeping your money in a Venmo or Square Cash account is not nearly as secure as keeping it in a bank account. First, most bank accounts are insured against loss by the Federal Deposit Insurance Corporation, or FDIC, for up to $250,000. That means, if a bank fails, the U.S. federal government guarantees to pay you back up to $250,000 of the money you held in your accounts with that bank. The majority of P2P payment companies are not FDIC insured, and though it’s unlikely any of them will suddenly go bankrupt with no notice, if one did, you would lose all of the money held in that account. Additionally, according to the terms of service for Venmo, the service can hold your money in reserve if it suspects your account is involved in some kind of wrongdoing, like fraud or money laundering. Other P2P payment apps likely have similar specific language in their terms and conditions, which you should make a habit of reading before using any app or service. Finally, if someone were to hack into your account, they could easily steal your money by emptying your balance into their own account.

For these reasons, the safest thing to do when you receive money on a P2P payment app is to cash out your balance immediately. A normal cash out takes one or two business days to complete, so to be even safer, you may want to take advantage of instant transfer options, which both Venmo and Square Cash offer. You pay a small fee, 25 cents for Venmo and 1% of the cash out balance for Square Cash, but in return your money will be transferred safely into your bank account in 30 minutes or less. Or, use Google Wallet, which transfers money sent and received instantly for each transaction (and also offers extensive fraud protection).

Another option is an app that transfers money directly from bank account to bank account, such as Zelle. While we wouldn’t recommend the official Zelle app, as it has had a rough launch and is currently getting savaged in its user ratings, you can also access Zelle using the mobile apps of participating banks, such as Wells Fargo Mobile and Chase Mobile. Zelle transfers go through in just a few minutes, though on the downside, you can only use it if both you and the person you’re sending money to have banks which support Zelle. Whichever app you choose to use, make sure that you avoid carrying a balance whenever possible.

Only pay people you know and trust

Many P2P payment apps, like Venmo, were originally marketed as an easy way for friends and family to pay each other back, and they work great for that purpose, but as they expand in popularity, they’re being increasingly used for business transactions between people who don’t really know each other. This is a bit of a problem, as a lot of these apps have meager buyer protection measures. When you send money from your checking account using a P2P payment app, what happens in most cases is that the company running the app initiates an electronic bank transfer on your behalf. Once the bank transfer starts, the app company assumes no legal liability for what happens afterward. This means if you get ripped off and want to reverse the transfer, the app company usually won’t get involved, and it’s up to you to sort the problem out with your bank. You can get more buyer protection if you link a credit card to your P2P payment app and use that to send money, as many credit cards offer $0 fraud liability, but paying via credit card incurs a 3% fee with a lot of payment apps. If paying a company or organization with a credit card directly is an option, you should probably just skip the P2P app altogether and do that. You’ll avoid the 3% fee, and potentially earn points if you have a rewards credit card.

On the flip side, you also shouldn’t accept money on a P2P payment app from someone you don’t know. P2P payment apps, especially Venmo, are rife with transaction reversal scams that look like legitimate payments at first, but fail to actually go through one or two days later when it’s time to deposit money into your account. People who fall victim to these scams generally have little recourse for getting their money back, as most P2P payment apps expressly state in their user agreements that you cannot use a personal account for business transactions. If you’re selling something on an online marketplace like Craigslist, and you do wind up using a P2P payment app to handle the transaction, don’t consider any payment legitimate until the money is in your bank account. A service like PayPal, which is set up to facilitate business transactions, is usually a safer bet.

P2P payment apps might be the way to pay in the future, but until they get more reliable, it’s best to exercise a bit of caution while using them. For more tips on how to stay safe while navigating the wide world of Internet-connected things, keep an eye on our technology blog.