So you’ve probably used Venmo, Zelle, Cash App, or PayPal — maybe even all of them. You’re not alone. More than 75% of U.S. adults have used some form of payment app, and that number climbs to 85% for consumers under 29, according to Pew Research Center.

And we get it. These apps are convenient. You go out for a group dinner, throw the whole tab on your credit card (hello, rewards points), and then everyone sends you their share through an app. Easy. Done.

But here’s the catch: A lot of people just leave the money sitting in the apps afterward. Life gets busy, and suddenly the app balance feels like a little slush fund — “mad money” you can dip into later. The problem? That money isn’t as safe as you think.

Why Leaving Money in Apps Is Risky

The Consumer Financial Protection Bureau (CFPB) has issued warnings about users leaving billions of dollars parked inside payment apps instead of transferring funds back to their credit union accounts. The concern is simple: When your money is sitting in these apps, it’s not insured the same way it is at your credit union.

Deposit insurance only applies to funds sitting in an FDIC-insured bank or an NCUA-insured credit union. If your money is hanging out in Venmo or Cash App instead of being swept back into your actual credit union account, it’s not eligible for that protection. And if the company holding your money fails, you could lose it.

Essentially, digital payment apps are being treated like banks and credit unions by consumers, but they don’t play by the same rules. Credit unions have guardrails in place to ensure funds are safe. Payment apps don’t.

Pro Tip: Read more about the risks of leaving money in your payment app.

The Popularity Problem

Let’s be real: You’re not going to stop using these apps, and neither is anyone else. In 2024, the amount of money transferred globally on P2P payment platforms hit $1.7 trillion. These apps have made moving money ridiculously easy — no checks, no cash, just a few taps on your phone — and they’ve become part of many of our daily lives. So the takeaway isn’t “stop using them.”  Instead, it’s don’t let them hold your money. Transfer your balance out quickly in order to get it secured ASAP.

Safety Guidelines You Should Follow

Besides keeping your balance at zero, there are other ways to protect yourself when using P2P apps:

 Never share your login information: According to Pew Research, about 13% of payment app users say they’ve fallen victim to a scam. The easiest way to keep your accounts safe is to lock down your login:

• • Don’t reuse usernames or passwords across multiple sites.
  • Don’t choose something obvious like “password123.”
  • Use at least 15–20 characters, with letters, numbers, and symbols.
  • Consider using a password manager.
  • Turn on multi-factor authentication (yes, it can be annoying, but it’s so worth it).

2. Understand the rules of payment app transfers: This part is critical. There’s usually no fraud protection with payment apps. Unlike credit or debit cards, which come with zero-liability protection, sending money through Venmo or Zelle is basically like handing over cash. If you accidentally send money to the wrong person, or worse, a scammer, you can’t cancel the transfer or get it back.

3. Pay attention to what the apps are doing with your money: If you’re leaving money in the app, ask yourself: who’s benefiting? Answer: the app company. The CFPB notes that some payment apps invest users’ funds in loans and bonds, pocketing the returns without paying you a dime of interest. They have every incentive to keep your money parked there.

What’s worse, many user agreements are vague about where the money is held, whether it’s insured, and what happens if the company or partner bank fails.

That’s not transparency — that’s risk.

Real-World Scams and Pitfalls

On top of the structural risks, there’s also the ever-present scam factor. Fraudsters love P2P apps because money moves instantly, and transfers usually can’t be reversed. Here are some common traps:

• The “accidental” payment scam. A stranger sends you money “by mistake” and asks you to refund it. In reality, they used a stolen card, and once the fraud is uncovered, the app claws back the money — leaving you on the hook.
• Fake purchases. Buying something through a marketplace? Scammers may insist on being paid through a P2P app. Unlike PayPal’s goods-and-services option, Venmo and Zelle don’t offer buyer protection.
• Phishing attempts. Fraudsters send fake emails or texts saying there’s a problem with your account. Clicking the link can compromise your login.

Remember: these platforms are designed for paying people you know and trust — not strangers.

Laws and Protections Are Still Catching Up

The good news is that regulators are aware of the risks. Some states are considering laws that would require app providers to hold reserves and prove they can meet their obligations if something goes wrong. But for now, these are just ideas. There’s no nationwide safety net in place. That means it’s on you to protect yourself by doing the following:

• Transfer balances out regularly
• Use your credit union for safekeeping (and ideally, for earning interest)
• Stay alert to scams

The Bottom Line

Peer-to-peer payment platforms are here to stay, and they’ve made life easier in countless ways…but don’t let convenience blind you to risk. These apps aren’t credit unions. They don’t insure your money. They don’t offer the same protections if you’re scammed.

So the golden rule? Don’t store money in them. Transfer it out, secure your login, and only send funds to people you actually know. Think of these apps as what they are — fast, useful tools for splitting dinner, paying the babysitter, or reimbursing a friend. But not a place to stash your cash.

from our partnership with Filene/HerMoney