A consumer finance group is warning people about payment apps such as PayPal, Venmo, Cash App, and Apple Pay.
According to the consumer financial protection bureau, these payment apps don’t offer the same protections as banks or credit unions when it comes to storing your cash. More than threequarters of us adults have used at least one payment app. But if something happens to one of those apps then customers could lose their funds unlike with a FDIC insured bank, where consumers are guaranteed up to $250 thousand dollars per account in case of failure.
The agency estimates that transaction volume across all us service providers was estimated at approximately $893 billion across all of 2022 and may reach nearly $1.6 trillion by 2027, making billions of consumer dollars at risk. And if the payment app goes under, customers could be left with no access to their funds and become creditors in a bankruptcy case.