History
PayPal was the first company to offer person-to-person (P2P) digital funds transfers in 1999. PayPal initially provided software security for handheld devices before shifting focus to digital payments. It became one of the first platforms to enable users to send and receive money via email, revolutionizing how people transferred funds online. PayPal’s innovation paved the way for other P2P payment services like Zelle, Venmo (acquired by PayPal in 2012), Cash App, Apple Pay and Google Pay.
It’s cash!
All digital transfers equal cash. Treat it accordingly. It is a one-way transfer. The app or bank can’t refund money after it is sent and received. The app can only return unclaimed funds.
When it’s gone, it’s gone. When it arrives, it belongs to you. Accidents can happen with name spellings, phone numbers and email addresses. Fraudsters want to exploit this fact.
Safety
Digital fund transfers are fast, low-cost, and use apps for payments. Wire transfers allow a higher max, but take longer, cost more, and require bank processing. With this revolutionary shift, let’s understand some basic premises and safe practices.
• A strong password makes it difficult for others to guess. Include at least 12 characters, combine uppercase and lowercase letters, numbers, and special characters, and avoid information such as names, birthdays, or common words.
• Two-factor authentication (2FA) is a security process. It requires two forms of identification: something you know (like a password) and something you have (a code sent to your phone).
• Verify recipient details for electronic funds transfers. Triple-check the recipient’s name, account number, and contact information (phone and/or email), and confirm them through a trusted communication method before completing the transfer.
• Avoid public Wi-Fi. Public Wi-Fi is less secure, making it easier for hackers to intercept sensitive information, such as payment details, during P2P transactions.
• Monitor transactions regularly. Tracking transactions helps detect unauthorized activity early. It allows for quick action to prevent further fraud or losses.
Before sending any amount, you can’t afford to lose, send $1.00 via a phone or computer application. Contact the recipient to ensure they received the dollar. This step ensures the payment transfers to the correct location without a problem.
How are Platforms Different?
• Zelle differs by being directly integrated into many U.S. banks’ apps. The integration allows for instant, fee-free transfers between bank accounts, without a separate app or account.
• Venmo offers social features, such as sharing transaction details with friends. It is primarily linked to U.S. bank accounts. It also allows for credit card payments, unlike some other P2P platforms.
• PayPal supports both personal and business transactions. It offers international payments, and provides buyer and seller protections, making it more versatile than most other P2P platforms. It also accepts credit cards for payments.
• Apple, Google and Facebook have “Pay” apps. These apps allow contactless digital payments at stores and online from a digital wallet. Most allow users to make payments from both bank accounts or credit cards.
Costs
Fees vary based on transaction type, location, and funding source. The fees below are only examples as of this publication date. Confirm platform terms and fees before using.
• Zelle: Free to send and receive money from a linked bank account, debit or credit cards. No fees for standard transfers.
• Venmo: Free to send money using a linked bank account, debit card, or Venmo balance. 3% fee for sending money using a credit card. Instant transfers to a linked debit card incur a 1.75% fee (minimum $0.25, maximum $25).
• PayPal: Free to send money using a linked bank account or PayPal balance. 2.9% + $0.30 per transaction to send money with a credit or debit card. Fees for international transfers may apply. Instant transfers to a debit card have a 1% fee (up to $10).
• Google Pay: Free to send money using a linked bank account or debit card. 2.9% fee to send money with a credit card (U.S. only). Instant transfers to a debit card have a 1.5% fee (minimum $0.25). Apple Pay and Facebook Pay are similar.
Mark M. Hancock, GRI, MRP, AHWD
REALTOR, New Build certified
214-862-7212 (call or text)
DFWmark@kw.com
DFWmark.com
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