Peer-to-Peer Payment Apps: Safe Solutions or Risky Bets?

Mobile payments have garnered significant attention over the last few years, but peer-to-peer payment apps are still outside the comfort zone of many users. According to recent Pew Trusts research, while 39 percent of millennials and 33 percent of Gen Xers are on board, just 24 percent of baby boomers are comfortable with the idea of mobile money transfers. So what’s out there, how does it work and is secure peer-to-peer payment really possible?

Right now, there are a few front-runners in the mobile payment space:


PayPal is trusted by many e-commerce companies as a standard payment method on par with major credit cards. Large retailers such as Walmart, eBay and Best Buy all support PayPal as part of their online checkout process. Sending money person-to-person can be somewhat cumbersome using the app’s main interface thanks to a lack of social site integration, but the company’s new feature — which gives each user a personal URL — should streamline the process.


Venmo has become a popular alternative for young adults. As noted by Newsweek, the app processed more than $1 billion in payments during January 2016 alone. The biggest benefits here include easy, direct payments to other Venmo users and the ability to “share” purchases and payments via an activity feed. Keep in mind the app doesn’t automatically log you out, meaning if your phone is stolen or hacked, you could lose big bucks.


Tell your roommates. A relatively new player in the peer-to-peer payments market, Splitwise is designed to help users “share bills and IoUs” and make sure everyone gets paid back. The app keeps a running total of your debt sum along with a specific breakdown of who and what you owe. Splitwise sends email reminders about these upcoming bill payments or overdue IoUs. In addition, the company has invested in “fairness research” and invites users to participate, then shares this data with users to help answer questions about how much everyone really needs to pony up after a meal or how living expenses should be optimally divided.

Drawbacks? It’s worth noting that the app’s Terms of Service include a line about personalized advertising based on the information you provide Splitwise. While this is a handy feature, it means a data breach could have serious consequences if hackers get their hands on highly personal details.

Google Wallet

As noted by Money, Google removed the ability to use Wallet in stores but kept the peer-to-peer functionality. The app is straightforward: You can send money to anyone with a valid email address, even if they’re not using the app. And although it doesn’t include the ability to share purchases or link back to social sites, Wallet is secure and free if you’re using a bank account rather than debit card as your funds source. Another benefit? If you’ve got the Google Wallet Card you can access transferred money immediately rather than waiting for bank approval.

Alas, There Are Problems

As the Pew research points out, while nearly 70 percent of Americans now own a smartphone, almost the same number are “concerned about the loss of funds or identity theft.” Yet, almost half aren’t sure if mobile payments are more or less safe than traditional payment methods.

Does this mean peer-to-peer payment apps are destined to remain just-out-of-mainstream use forever? Probably not. Sure, there’s work to be done on the big problems of data capture, storage and retention. Companies need to be upfront about what they’re doing, why and what happens if they’re breached. But because of their convenience and growing following, there’s also a high likelihood that mobile payments will become as ubiquitous as chip-enabled debit cards or email transfers as big banks and credit processors adopt and secure this technology.

The takeaway? If you’re wary of peer-to-peer payment apps, don’t worry — security is on the way up, and with big companies behind the development of new apps, safety is quickly becoming standard practice.

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