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 of 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 said.
By 2020, people are expected to make about $726 billion 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,” said 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 card or credit card. Boynton said, 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 and then look for people selling big-ticket items. They get the goods. You are out your money.
Boynton said the option of canceling payments also creates issues for sellers.
“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," Boynton said.
Another risk: Many digital wallets don’t offer the same fraud protections you get with a credit card.
“There are some mobile apps that, if you have fraud, they will not protect you,” Boynton said.
Gallagher has her own way of playing it safe.
“I always, always, always make sure the digital payment clears before I even do the service for them,” she said.
Beyond that, she said she's sold.
“I really believe this is the way things are going," Gallagher said.