Know Your Risk When Using a P2P App (2024)

FAQs

Know Your Risk When Using a P2P App? ›

It's also important to know that, even though they may be associated with your bank account, no fraud protections exist on P2P apps. Once you press send it's virtually impossible to get your money back. Impersonation scams: Criminals often persuade victims to send money by pretending to be someone they're not.

The real security concern is that P2P payment apps make it easy to send someone money, but they don't always make it easy to reverse or cancel a transaction. Because of this, criminals can use them to trick victims into transferring funds.

Cons of Using P2P Payment Apps

Some let you send and receive money instantly, while for others, it can take several business days. Some P2P payment providers charge transaction or service fees. Refunds or disputes may be difficult to initiate, given the lack of middlemen.

Protecting Yourself From P2P Payment Fraud

Avoid transactions with sellers who have negative reviews or seem suspicious. Avoid Friends and Family Option: On some platforms, like PayPal, sending money using the "Friends and Family" option waives your right to buyer protection.

The main peer-to-peer lending risks are: Yourself (psychological risk). Not enough diversification (concentration risk). Losing money due to bad debts (credit risk). Losing money due to a P2P lending site going bust (platform risk).

Fraud. A lack of anti-fraud defenses during the different stages of the procure-to-pay process, as well as a few fraud prevention and detection mechanisms, can result in fraud. An example is invoice fraud through inflated, duplicated, or false invoices.

These applications may also give unauthorized people access to financial or medical data, personal documents, sensitive corporate information, or other personal information. Files shared through P2P applications may include pirated software, copyrighted material, or p*rnography.

Denial of Service (DoS) Attacks: P2P networks can be vulnerable to DoS attacks, where an attacker overwhelms the network with traffic, causing it to become unresponsive or slow.

Disadvantages of P2P Lending

Default Risk: There exists a possibility of borrowers defaulting on their loans, causing financial losses for lenders. Regulatory Gaps: P2P lending lacks the stringent regulations characteristic of traditional lending, leaving room for potential fraud and unethical practices.

If you are on a network, even if just one computer becomes infected, it can spread to all other workstations on the network. Some unscrupulous P2P abusers even use other people's computers to remotely store illegal data, such as child p*rnography.

What kind of issues we can have with a P2P? ›

Some disadvantages of P2P networks are the following: Users can't centrally back up files and folders. Each computer can access other computers, which slows performance. Files aren't centrally organized into a specific shared area, but rather stored on individual computers.

First and foremost, because they're as fast and convenient for criminals, as they are for consumers, P2P apps—like Zelle, Venmo and Cash App—are favorite tools for modern-day scammers. It's also important to know that, even though they may be associated with your bank account, no fraud protections exist on P2P apps.

It is essential to be vigilant against potential fraud when using P2P apps. While both PayPal and Venmo offer protection against unauthorized transactions, users should always use best practices, such as verifying a recipient's details before sending money.

Malware Distribution: P2P networks can be used to distribute malware, as files are shared directly between users. This can lead to widespread infections if a user's system is compromised. Data Breaches: Since P2P networks often involve the sharing of sensitive information, they can be targets for data breaches.

Peer-to-peer sharing can result in access to your personal information, malware distribution and if your computer is on the institutional network and exposes student/faculty/staff information, both you and the institution may be liable.

28% of P2P payment users say they have been scammed.

Meanwhile, 21% of users say they have received cash from the wrong sender. This type of error might appear innocuous on its face, but it is often the initiation of an intricate scam tricking users into laundering money from stolen credit cards.

In P2P pending, the risk is that some borrowers may not be able to repay the loan. However, RBI has set guidelines for P2P NBFCs to minimise such risks. P2P lending is riskier than FD (the reason for higher returns).