If you thought people weren’t using cash as often before the pandemic, imagine how little it’s being used now.
Long before the coronavirus spread, many of us had already made the switch from cash to card — and some people have taken it a step further and dropped cards altogether.
Thanks to all the new — and some not so new — payment apps available for smartphones, there are more secure ways to pay than ever. Some might even argue they’re a better option than a card that can easily be hijacked via data breaches. Tap or click here to read more about how millions of credit cards were stolen in one breach.
So if cash and cards are both on the way out, what’s a person to do when it’s time to split bills or pay a friend back? For many smartphone users, peer-to-peer payment apps are the perfect solution. They combine the ease and convenience of cash with digital portability and security.
But which one is best? We’ll help you pick your new go-to.
Why use a payment app?
Peer-to-peer payment apps are easy to use and make paying a friend or completing a purchase a breeze. Just download a free app, create your profile and supply your payment card or bank information. Then, you look up your recipient’s username and send them a payment. The funds arrive instantly, and you can save their profile for quick transactions in the future.
Your bank and the app work together behind the scenes to move the money securely. Temporary authorization codes are sent back and forth between the two to ensure that no information gets intercepted.
There are several different apps to choose from (some you’ve heard of and some you may not have) and some are safer than others. Let’s walk through the most popular options, as well as their pros and cons. Ultimately, picking the best app comes down to your preference — as well as financial and security demands.
Apple Pay: A secure choice for iPhones
If you’re an iPhone user, you can’t go wrong with Apple Pay. Initially designed to be a full wallet replacement for retail payments, Apple Pay has since branched into other business ecosystems — including peer-to-peer payments and even credit cards. Tap or click to learn more about the Apple Card.
Unfortunately, Apple Pay is exclusive to iOS devices, and money cannot be sent from Apple Pay to an Android user. You’ll need another app. (Not to worry, Android users. We’ll get to that.)
Don’t worry about hacks or your payments being intercepted. Apple Pay works through a separate chip called the “Secure Element” inside each iPhone. For every transaction, this dedicated chip sends a one-time code that obscures your personal data. It’s a virtual middleman that makes money-sending safe and secure.
But Apple Pay is still extremely popular for quick payments. It’s highly secure and integrates with apps like Messages and Safari. For example, to send a payment, all you need to do is start writing a text message.
To get started, simply tap the black Apple Pay icon when you’re texting another Apple user. You’ll have the option to set or request a specific amount, and send it off with a custom message.
Funds received go into the recipient’s Apple Wallet and can be kept on their device or added to their bank account through the card they’ve set up with the service. Tap or click here to learn how to set up Apple Pay, and learn about more features and benefits.
Cash App: A popular option with fun giveaways
Cash App is one of the most popular P2P apps you can download. It’s easy to use, features a clean design and lets you group your frequent contacts and transactions in an easy to understand way.
You can also buy Bitcoin or stocks using your balance right in the app. Tap or click here to see all the risks before buying Bitcoin and other cryptocurrencies.
This may sound barebones, but hey, it’s a payment app. What more could you want?
Well, aside from being available on more than one platform (looking at you, Apple Pay), Cash App built its user base with the help of highly publicized Twitter contests called #CashAppFriday. Participate by being among the first to reply or retweet on Cash App’s Twitter and Instagram accounts.
If you’re selected, the app’s owners will send a prize right to your Cash App account. These contests are held nearly every Friday and are often among the top trending topics on Twitter. After all, who doesn’t want free money?
That said, #CashAppFriday has a tendency to attract scammers, and although the platform is secure and encrypted, it’s nearly impossible to recoup losses once you send the money. Tap or click here to find out more about Cash App scammers.
Venmo: The gold-standard for peer-to-peer payment apps
When people think of P2P payment apps, Venmo is often the first one that comes to mind. That’s because this app has been around for longer than its competitors — and with the help of its parent company PayPal, Venmo has become one of the most reliable methods for moving money.
One unique feature is the idea of money-changing as a social phenomenon. Upon booting the app, you’re treated to a Facebook-like activity feed showing recent transactions between your contacts and theirs. This means you can see family members paying their friends for food or repaying coworkers for movie tickets.
These contacts are pulled from your device, as well as your Facebook friends list if you give the app permission. Transactions you engage in are visible to all of your friends and contacts by default.
We highly recommend hiding that info, though. There’s no reason to give snoops a look into your finances, even if you are just paying back a friend for a pizza.
Changing this setting is simple. Open the app, tap Settings and choose Privacy. Then, select Private under Default Privacy Settings. You’ll be able to hide your transaction feed from your Venmo friends once it’s checked off.
So, is Venmo a stable, reliable app or another way for companies to spy and harvest data? That depends on how you set it up, of course — which brings us to our next entry …
Facebook Pay: Send money to friends across multiple apps
Not content with merely occupying the majority of the known internet, Facebook is also eager to facilitate your financial transactions. Facebook Pay comes pre-installed with every Facebook profile and can easily be accessed by opening the Facebook Messenger app.
To send or receive a payment, open a message thread and tap your friend’s profile image. On the menu that appears, select Send or Request Money, then enter the amount. For security, you have the option to set a payment PIN, and Facebook claims to encrypt the service for users.
Right now, this app is only available for U.S. users via Facebook and Facebook Messenger apps. Facebook plans on integrating the service into other software it owns like WhatsApp and Instagram in the near future.
App integration and easy setup may make Facebook Pay seem like a solid option. But keep in mind, you’re placing your trust in a company that has failed time and time again to earn it. Tap or click here to see how Facebook stalks you across the web.
Zelle: Your bank might be using it, but should you?
If you bank with Chase, Capital One, US Bank or Wells Fargo, you probably know about Zelle already. This app functions much like its P2P relatives, but unlike those apps, Zelle is intimately tied with the mainstream banking industry.
Zelle’s technology underpins many of the payment features found in the branded apps of American banks. If you use the Chase QuickPay feature, you’re using Zelle. You can also download Zelle’s standalone app.
That said, Zelle isn’t in the same league in terms of cybersecurity and privacy. The Zelle app has no way to keep you from accidentally sending money to the wrong person.
Plus, when you set up a payment, you’re asked to confirm the information is correct. Mistype a phone number, and you won’t be warned again before transferring the money. If your money goes to the wrong person, don’t count on getting it back. Zelle even advises users to “treat it as cash” on its website.
That’s one reason Consumer Reports gave Zelle a 50 out of 100 in its last P2P app review. Keep in mind, this reflects the standalone Zelle app, not the Zelle features included in mainstream banking apps.
Winners and losers: Which payment app is best?
So, which payment app is the right one to use? The answer to that question depends on what you’re trying to do, what system you use, and how much you value your privacy.
Venmo, due to its security and stability, is a top contender. That said, it has some privacy issues if left on default settings. The quick adjustment we showed you above can remedy this issue. Apple Pay is another great option with few downsides, but Android users are out of luck there.
And Zelle can be risky to use if you aren’t precise with your keyboard.
No matter which you pick, the important thing is to be 100% sure about who you’re sending money to. With payment apps, the transactions are much like cash: Once your payment is gone, it’s gone. No refunds.
But when it comes to shopping online from your home computer, there are plenty of safe options to check out that don’t even require the use of your smartphone. Tap or click here to see the safest ways to pay online.