Are Money Apps Safe To Use?
Money apps are one of the most popular ways to look after your finances. 93% of people in Britain currently use online banking — and mobile money apps are quickly becoming the most used way to track, manage, and save money.
Money apps are convenient — but are they safe? One study found that 31% of fraud attacks [pdf download] were linked with rogue mobile apps. So how can you identify which money apps can be trusted before you link them to your bank account?
In this article, we’ll cover:
- how to identify safe, secure money apps
- common scams associated with banking apps
- FAQs about money app safety.
How can you tell if a money app is safe to use?
Apps associated with well-known banks are almost always protected by strong security measures. So if you’re considering using the official app for a high street bank or well-known digital bank (such as Monzo or Starling Bank), you can be sure the app is well-protected (although it’s still important to take your own safety precautions — more on that later).
But you can also trust dozens of other financial apps — you just need to know what to watch out for. Here’s what you should ask before you connect an app to your bank account:
- Is the app provider insured?
- Are they regulated by the Financial Conduct Authority (FCA)?
- Do they encrypt your data?
- Do they have robust anti-fraud measures in place?
You can usually find this information on the app website, but if you’re unsure, get in touch with the app provider to find out. Reviews and feedback from other users can also help you decide if an app is safe to use.
What are the most common scams affecting money app users?
Many money app users are targeted by phishing scams. Phishing happens when someone tries to trick you into revealing personal information, such as card details or your online banking PIN and password. Phishing scams are usually sent by email or text.
Password cracking can also be a risk if your details have previously been leaked. If your money app PIN is the same as PINs you use elsewhere — or you’ve used an easy-to-remember number like your date of birth — criminals can hack into your account more easily. That’s why it’s important to use a different password for each online account.
What happens if someone tries to access my account through the app without my permission?
Most attempts to hack into online bank accounts fail. If the hacker doesn’t have the right information to access your account, they won’t be able to see your details or get hold of your money. So it’s important to keep your passwords and PINs secret.
Sometimes, hackers go straight to the source and target the app providers themselves. If the company’s security measures aren’t strong enough, hackers may be able to steal information from them. That’s why data encryption is key — encrypted data can’t be seen by hackers, even if it's stolen.
How do money apps and banking apps prevent fraud?
Finance companies put lots of measures in place to stop unauthorised account access, or control the damage. This includes:
- Biometric login — facial or fingerprint recognition is needed to login
- PIN number — you’ll set your PIN, so make sure it’s not easy to guess
- Multi-factor authentication — you must verify your login attempt via your email address or phone number
- Anti-fraud algorithms — banks have online security systems that can detect and block fraudulent activity before it takes place
- Login attempt limits — if someone tries to login multiple times without success, they’ll temporarily block your account and notify you
- Emergency phone numbers — if you suspect your account has been hacked, you can call your bank to report it so they can freeze your funds while they investigate.
Is it safe to send large sums of money through an app?
It’s perfectly safe to send large sums of money through a secure app. Most apps will prompt you to provide additional verification when you try to make a large payment.
However, you should also take precautions to protect yourself and your money when you’re dealing with large amounts of cash:
- Double check the bank details of the person you’re sending money to — ideally, have this conversation in person or on the phone (if they called you, call them back on the number on their website) as emails can be intercepted
- Send a small payment first to ensure it’s received — when you have confirmation that the bank details are correct, you can make a larger payment
- Don’t send money to people you’ve met on online dating sites and haven’t met in real life — romance scams are now very common.
What can I do to protect myself when using banking and money apps?
The best way to keep your money safe online is to take a zero-trust approach to sharing your personal information and transferring money to other people.
If you’re not 100% confident that you’re sending money to the right person, don’t send it. If someone you don’t know is pressuring you to make a payment, something probably isn’t right. Seek advice from someone you trust if you’re not sure whether a payment request is legitimate.
Are peer-to-peer money apps safe to use?
Yes. Providing they’re insured, regulated by the FSCS, and have strong anti-fraud protection, P2P money apps like Venmo and CashApp are safe to use. You’ll just need to be extra vigilant when entering email addresses or mobile numbers, as a wrong letter or number can stop payment reaching the right person.
Is it safe to use an app to manage my money club?
Yes! Money clubapps like Bloom are very safe (providing they follow the guidelines above). In fact, they tend to be safer than carrying and exchanging cash in person.
At Bloom, we do everything we can to keep your money safe. With ID verification, leading anti-fraud security systems, and invite-only circles, you can make sure your money club is completely secure at all times.