Being a makeup artist is just one-way Claudine Gallagher earns her income. But her payment doesn’t come in cash or check. She counts on a couple apps when it’s time for customers to settle up.
“It’s 2018. I don’t know anyone who does checks anymore. Sorry Mom and Dad. But cash is a lot more hassle because there’s really no paper trail,” Gallagher says.
By 2020, people are expected to make about 726 billion dollars in purchases using digital wallets such as Venmo, Zella, PayPal and Apple Pay.
“We want speed and convenience, and sometimes there’s a price to pay for that,” says Mike Boynton of the Better Business Bureau.
In this case, the price may be security. These apps are typically connected to your bank account, debit or credit card. Boynton says now, scammers are finding creative ways to separate you from your money. For example, they may connect your stolen credit card to their digital wallet, then look for people selling big-ticket items. They get the goods. You are out your money. Or, he explains, “Perhaps they’ll pay for an item. You, as a seller, in good faith take that mobile app payment, but by the time you ship the item, the buyer can cancel that payment.”
Another risk: many digital wallets don’t offer the same fraud protections you get with a credit card. Boynton explains, “There are some mobile apps that, if you have fraud, they will not protect you.”
Claudine has her own way of playing it safe. She says, “I always, always, always make sure the digital payment clears before I even do the service for them.” Beyond that, she’s sold, saying, “I really believe this is the way things are going.”