Don't Get Scammed: P2P Payment Apps

Oct 13, 2022

(TL;DR) scams and fraud happen every day on peer-to-peer (aka P2P) money apps like Venmo, PayPal, Zelle, and others. Here’s how to avoid getting ripped off — and what to do if someone steals your money. 

What are peer-to-peer payments?

If you’ve ever Venmo’d a friend for dinner — or, even better, gotten paid on Venmo — you’ve used a peer-to-peer (P2P) payment app. P2P payments allow you to send money directly to someone else, instantly. P2P payment apps like Venmo, Cash App, PayPal, and Zelle let you send money to anyone, right from your phone, tablet, or laptop using your bank account, credit card, or account balance in the app. 

Alternatively, the ATM can be inconvenient, and walking around with a wad of 50s isn’t exactly secure. A check can take several days to deliver and clear. Meanwhile, wire transfers can take 1 to 3 business days to hit your account. You’ll have to know the recipient’s name, address, bank account and routing numbers, or share your own — data you should be careful about giving out. 

Who can use P2P payment apps? 

You have to be at least 18 years old to use most P2P payment apps (there are exceptions — Cash App, for one, lowered its minimum age to 13.) Users usually have to be located in the US with a US cell phone that can receive text messages from short codes. You’ll also likely need to have a domestic bank account, credit card, or debit card — to transfer some of that fresh dough to your checking account, for example, or if you want to make a payment larger than your balance in the app. 

Who actually uses them? 

Just about everyone you know, probably. Over 90% of millennials and Gen Zers say they’ve used a P2P payment app before — to pay for things like food, services, entertainment, donations, even rent, instantly. 

With P2P payment apps, what are some red flags to look out for?

Speaking of instantly — that’s how fast a scam can happen too. Beware of these red flags:

  • Messages supposedly from a P2P app asking you for a verification code
  • Sellers asking for a Venmo payment before you even meet; 
  • Sellers asking you not to mark a payment as a business transaction; 
  • Someone you just started dating asking you for loans and gifts; 
  • Someone trying to overpay you and asking for a refund for the difference; 
  • A stranger paying you money out of the blue. Yes, even the promise of “extra money” can be a trap! 

Some red flags are deal breakers: Like any phone call, text message, or email asking you for a verification code. A legit agent working for a P2P app will never ask you for this code, period. So don’t give it out to anyone, ever, and end communication immediately.

Other situations can be more of a gray area. For example, your neighborhood hairstylist asks you not to check the “business transaction” box on Venmo so they can avoid paying the fee. There might be no harm in that if you already got the haircut…especially if it looks good. In these situations, always use your best judgment.

What kind of P2P scams are out there?

P2P scams are constantly evolving. But there are common scams you should look out for, and places that are especially risky. 

The fake prize trick 

Someone pretending to be from an app like Venmo or Zelle says you’ve won a prize. They want you to click a link to an unofficial site prompting you to enter your username and password. With this stolen info, they can log into your account for real and drain your funds. Don’t engage with these messages.

Fake P2P agents 

A fraudster saying they’re associated with the P2P app will text, call, or email you saying they’ve noticed some suspicious activity in your account — and that they need the verification code the real Venmo/Zelle/Cash App has sent you. They’re trying to use this code to get into your account. Never give your verification code to anyone. 

Report email phishing attempts to your email provider (for example, Gmail) and report text-message “smishing” attempts by sending a copy of the scammer’s messages to 7726 (SPAM) to report it to your wireless provider. You can report unwanted phone calls to the FTC.

Pretending to be someone you know 

A scammer can create an account impersonating one of your friends, then urgently ask you for money. (Especially if your payment history on an app like Venmo is public.) You should always click into a requester’s account to confirm their username and your shared transaction history. If it’s someone you know, contact them outside the P2P app to confirm if the request is actually from them, and consider setting your P2P payment history to private.

Getting $$$ out of the blue

A stranger sends you $100, says it’s by accident and asks for you to send $100 back to them. What’s the scam there? If they used a credit card, they (or the person they stole it from) could dispute the original amount they sent, which will get taken out of your account anyway. Which means you’re out of the $100 you went out of your way to “refund.” Instead, you should contact the P2P app for help.

Someone on a dating app is asking for cash

Did someone say Tinder Swindler? People lose hundreds of millions of dollars to romance scammers every year. So be careful with your heart (and your debit card).  

Buying and selling online

If you’re selling something, a “buyer” might send you screenshots of non-existent payments or faked emails from, for example, Zelle. They might even say they added extra money to the payment due to a Zelle “business account upgrade,” and ask you to refund it to them. 

Always confirm receipt of payments yourself by going into your account and reviewing your transaction activity. And when you’re buying, beware of sellers who ask for P2P payments before you pick up your haul. 

These goods-and-services scams often happen on platforms like Facebook Marketplace, Craigslist, and OfferUp. You'll also find a variety of grifts in some unexpected places, like Twitter, Discord, on crypto websites, in WhatsApp groups, and in Telegram channels — platforms that aren’t heavily moderated or monitored. 

Oh no…I’ve been P2P scammed! What do I do?

If funds originated from your bank account or debit card, unfortunately, the chances of getting your money back are slim. Even innocent mistakes (like adding an extra zero or wrong recipient phone number) are often irreversible. This lack of consumer protections is another reason why scammers and fraudsters are drawn to P2P payment apps. 

But if you used a credit card to fund a P2P payment, you will likely be able to dispute scammed or fraudulent charges through your credit card company. However, most P2P apps charge you an extra 3 percent to pay via credit card — so you’ll have to decide how much that extra protection is worth.

Immediately report scams to the app where it happened (and help prevent it from happening to someone else). The FTC is another place to report online and phone swindles. You can also file a complaint against the app with the Consumer Financial Protection Bureau’s Consumer Complaint Database and the Better Business Bureau; accredited companies (including Venmo and Zelle) are required to respond to BBB complaints.


P2P payment apps let you send and receive money instantly. They’ve also made it easier for scammers to steal your money — for example, by pretending to be from a P2P app to get your login data. But you can avoid getting scammed. Never give your verification code to anyone, confirm payment by going into the app yourself (instead of relying on screenshots), and make sure the friend requesting money actually is someone you know.