Are Money Transfer Apps Safe?

I’ve been thinking about using a money transfer app besides my bank one for a while now, but are they actually safe?

First there was internet banking, which was first introduced for internal use in US banks way back in the 1980s. By the late 2000s, technological advances meant its use had become reasonably commonplace in the average household.

The introduction of Apple’s iPhone in 2007 started to slowly shift internet banking from desktop computers to smartphones, and by 2011, online banking was a mainstream tool on both computers and smartphones across the globe. Since then, there has unfortunately been cyber-attacks and safety concerns regarding online banking.

Now, as social banking takes hold (the ability to transfer money to friends quickly via apps), fresh fears for cyber banking are beginning to circulate. I’ve taken a look at how safe the new social banking methods are, and whether you should feel comfortable getting on-board with this new tech innovation.

Instant Transfer via Mobile Number

Large banks are eliminating the need to know someones bank details to send them cash. UK bank Barclays launched the new ‘Pingit’ feature, which enables anyone to send money to someone else using only their mobile number. The app has recently become available to everyone, regardless of whether they bank with Barclays.

The premise is quite like that of Paypal – the popular platform that allows you to send money using someones email address – but simply using a mobile number instead. If you’ve placed your trust in Paypal before, Pingit shouldn’t be much of an issue for you.

However, concerns have been raised about sending money to the wrong bank account by entering a wrong phone number. These concerns are nothing new. We’ve all feared that we’ve gotten our friends email address wrong when sending money via Paypal, and triple-checked the sort code when sending via traditional bank transfer. On directing money to the wrong number, Pingit says on their website that while they are not responsible if you accidentally transfer to the wrong person, they will endeavour to recall your money. Recalling is made easier if the recipient has a Barclays account; if they don’t, it’s a bit harder.

The advice here is to check and check again that you’ve got the right number when sending money. This is certainly a flaw in the transfer system; one that could be solved with further security steps. But if they’re taking a lead from Paypal, Pingit will be one of the safest money transfer methods around.

Sending Money Abroad

There are now plenty of ways to send money across the globe, which can’t always be done through your country’s own bank account.

Apps like Pangea are making it simple, safe and secure to send money to someone who holds a local bank account in any of the 15 countries they serve. Your money transfer reaches the receiver’s bank account instantly – an attractive prospect for those wanting to pay a friend or relative in another country.

Pangea make it clear on their website that they are always available to help if you believe your money or account with them has been compromised. There are extra security steps in place, as well as mobile numbers, to ensure your money reaches its destination. Other bank transfer apps could do well to learn from this system.

People are understandably more fretful about sending money to different countries, but even sending money to a number or email address in our own country strikes many people as hazardous. Even one more layer of security would make people feel better about using services like Pingit – such as using a unique passcode as well as a mobile number, to assure users they are sending to the right place.

How to Stay Cyber-Safe

As long as you’ve got all your digits correct, online, mobile and social banking is totally safe. The companies behind the processes have solid contingency plans in place to help you should anything go wrong (which is very rare, anyway). Banks and other corporate money transfer sites have beefed-up security in the wake of cyber-attacks on other institutions, to make sure their customers feel entirely safe.

Of course, have a read through of the security measures before you sign up to these apps, but be secure in the knowledge there’s never been a safer time in history to use online banking.

Disclosure: This post is sponsored by Pangea.

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