The use of money management apps to pay for services, split expenses with family and friends, or reimburse others is becoming increasingly common among the Latino community. Apps like Zelle, Cash App, and Venmo are among the most popular, but they're not the only ones, and like anything involving money exchange, they also carry risks.
Un Pew Research Center study It found that Hispanic adults who use these platforms are twice as likely as white adults to have sent money and later discover it was a scam.
At the national level, Federal Trade Commission The FTC received more than 90,000 fraud reports linked to payment applications in 2024, almost double the previous year, with losses exceeding $390 million.
In this article of Enlace Latino NC We'll tell you how to use these types of applications without jeopardizing your digital banking security and without falling for online scams.
What are virtual money apps?
These are applications that allow send and receive money From your cell phone, without using cash or going to the bank. The transfer takes seconds and, between individuals, is usually free.
Although they serve the same function, they do not all operate in the same way:
Zelle is directly connected to the user's bank account, and most banks in the country offer it within their own app. Cash App and Venmo, on the other hand, function as a digital wallet: the money is stored within the app until the user transfers it to their bank.
Other frequently used options include PayPal, one of the oldest and owner of Venmo, and Apple Cash, which only works between iPhone users.
How to use them safely?
The most important rule is simple: treat these apps like cash. Once the money is sent, in most cases it cannot be recovered.
These are the recommendations from the FTC and consumer advocacy organizations:
Send money only to people you know. These apps are designed for transferring money between family and friends, not for paying strangers. If someone you don't know asks to be paid through this method, be suspicious.
Verify the recipient before sending. Double-check your username, phone number, or email address. One wrong digit and the money goes to someone else. Getting it back is nearly impossible.
Activate two-step verification. This feature requires an additional code each time someone tries to log in to the account. It is enabled in each application's settings.
Use PIN or fingerprint. Configure the app to require a password, PIN, or fingerprint before sending money. This way, if the phone is lost or stolen, no one can move funds without authorization.
Do not leave large balances within the app. Money stored in Cash App or Venmo doesn't always have the same protection as money in a bank account. It's a good idea to transfer it to your bank frequently.
Avoid public Wi-Fi. Open Wi-Fi networks in cafes, airports, or shopping malls are easy to intercept. It's best to use mobile data when making transactions.
Related: New remittance tax: calculate how much you'll have to pay to send money home.
What are the most common scams?
Scams involving payment apps are increasing year after year and tend to follow the same patterns. Knowing these patterns helps you detect them before sending money.
- Fake sellers. Someone offers a product or service online at a good price and asks for payment upfront through the app. Once they receive the money, they disappear. The product never arrives.
- Messages from a supposed family member or friend in distress. You receive a message from an unknown number claiming to be a relative or close friend who urgently needs money. Before sending, be suspicious. It's best to call the person at the number you already have saved to verify.
- Calls from the fake bank. The scammer impersonates a bank employee and warns of a supposed problem with the account. They ask you to send money or share a verification code to "protect" the funds. No bank ever asks for this. If in doubt, hang up and call the official number on the back of your card.
- Fake prizes and raffles. Messages that claim a prize and ask for a "fee" to be paid. If you have to pay to receive a prize, it's not a prize.
- Refund promises on social media. Over the past year, videos have circulated on TikTok and other social media platforms claiming that the Consumer Financial Protection Bureau (CFP) provides cash refunds to victims of Zelle or Cash App scams if they fill out a form. This is false. The CFP does not issue payments through these methods.
Another resource: How to recognize and avoid phishing scams From the Federal Trade Commission – Consumer Tips.
What to do if you fell for a scam?
Acting quickly increases the chances, however small, of recovering your money. These are the recommended steps:
- Report fraud within the application Each app has a support section where you can report the transaction.
- call the bank If the app is linked to your bank account, notify your bank immediately. In some cases, the bank may block further transfers.
- Change the app password and the associated email account.
- Report the scam to the FTC en ReportFraud.ftc.govThe site has a Spanish version.
- Save screenshots of the messages, amounts, and dates. This information is useful for any subsequent claims.
Virtual money apps are a practical tool that's here to stay. Using them carefully and being aware of the most common pitfalls is the best way to take advantage of their convenience without losing money or falling victim to scams.
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