P2P Payments: Do The Benefits Outweigh The Risks?

April 18, 2021
min read

These days, there are many P2P options in the market, including: Apple Pay, Google Pay, Paypal, Facebook Pay, Venmo, Zelle and Square Cash. As we continue through our second year of the pandemic, mobile P2P payment apps and services have increased in popularity like never before.We know that perceived security is one of the strongest predictors of whether or not someone will use a P2P app or service, but what are the risks and do they outweigh the benefits?

P2P Payment Benefits

P2P payments are easy to use

P2P payment applications and services are convenient, can be accessed anywhere with a phone and easy to use.

Real-time payments

Payments are nearly instantaneous with most apps. There’s no waiting for cheques to clear. No need for someone to take cash out to pay you back. It’s fast and easy.

Contactless transactions

Transactions can be made without the other person present. They are completely contactless. With the need for social distance to avoid catching COVID-19, this is arguably the most convenient way to pay someone back without making contact.

Payment notifications

Nearly every application has notifications or warnings letting you know if a transaction is about to be made. These notifications help prevent you from sending money to the wrong person. Most also have a passcode-lock option to prevent someone from making payments without you. The best options require QR codes or dedicated links to share your deposit address without making mistakes.

Bug bounty

Venmo, Paypal, Zelle, Apple Pay, Google Pay, Facebook Pay, and Square Cash all offer cash rewards for people who are able to report vulnerabilities or exploits on their applications. This helps each company continuously keep their application security updated.Using P2P payment apps seem like the best solution for sending money between friends or making payments conveniently but what are the risks associated with them?

P2P Payment Risks

Instant payments

Transactions are instant with most P2P applications, you cannot cancel or change your mind once money is sent.

Payment reversal

There is no payment reversal if you send payment to the wrong person. This is a surprisingly easy mistake to make. Follow the “measure twice cut once” rule – always double check the address is correct to avoid misdirected funds.


Because it is nearly impossible to reverse payments once sent. Fraudsters will often coax victims into sending money to them. This typically happens where the victim is tricked into sending money to a scammer.

Increased adoption

As more consumers use P2P payment services, and grow more comfortable using these services, fraudsters inevitably adapt to leverage the use of P2P payments.

User security

Although many applications offer two-factor authentication as a security feature, several applications default to using only password verification. The use of multi-factor authentication as a default would help ensure accounts do not get compromised. Strong passwords and multi-factor authentication for all of your apps are recommended and an important way to keep your money and identity safe and secure. Read our post on the importance of strong passwords here for more info.Generally speaking, transactions from one person to the next are very secure. The major risks associated with P2P transactions are how consumers manage their applications and how they intend to use the application. So do the benefits outweigh the risks? We think so. As long as you are diligent with strong authentication methods and you trust the person you are transacting with, you can keep your money and information safe and secure.