Are Money Clubs Secure?

Pardna, kametis, contributions are one of the most popular ways to pool money around the world.

But do money clubs keep your money safe? And is there a way to improve the security of your money club so you know your money is always protected?

Here, you’ll find out why using a money club app is the safest way to save with your friends and family.

How do money clubs work?

A money club is a group of people who come together to contribute a fixed amount of money at regular intervals. Group members then take turns to receive the pooled money: the payout.

At the end of the rotation, every person in the group will have contributed the same amount and received an equal payout.

For example, say five friends agree to contribute £100 to their club each month. Every month, £500 is collected in total. The first person receives £500 at the end of the first month. This is repeated four more times until everyone has received (and paid in) £500.

Most clubs consist of families, friendship groups, colleagues, tribe members, or other people from the same community. It’s important to join a club alongside people you know and trust.

Are money clubs secure?

Money clubs are built around trust. Pooling with other members of your community makes people more likely to pay in on time, as they value their relationships with other members of the club.

But there are still some known security concerns around money clubs, especially if you’re dealing in cash:

• Possible theft — Carrying or storing large amounts of cash can make you a target for thieves.
• Fraud — Saving with people you don’t know well can lead to fraud and loss of funds.
• Lack of protection — There’s no way to retrieve your money if cash goes missing or is stolen.
• Payout delays — If people are slow to pay in, you may not receive your payout on time.
• Lack of regulation — This can make informal savings clubs attractive targets for criminals.

Most money club leaders and contributors are ethical and trustworthy. But the lack of regulation and protection can make starting or joining a money club a risky venture.

Technology can make it much safer to manage and contribute to a money club. By using an app like Bloom, you can transfer funds and receive payouts securely.

Should you use an app to manage your money club?

Using a secure money app to manage your money club is a great way to improve the safety of your money club.

With strong in-app security measures, it’s safer, faster, and easier to manage money, make contributions, and ensure pay-ins and payouts are received on time.

Bloom Money is not a regulated entity, however, our financial operations are conducted through [our subsidiary company] Finance for All Limited (Company No. 13175384) and we partner with AF Payments Limited, an authorised Electronic Money Institution.
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AF Payments Limited (AF Payments) is authorised by the Financial Conduct Authority (FCA)under the Electronic Money Regulations 2011 (EMRs) with Firm Reference Number 900440 for issuing electronic money and payment instruments.
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As an Electronic Money Institution, AF Payments is required to adhere to the regulatory standards set by the FCA, ensuring that customer funds are safeguarded, although they are not protected by the Financial Services Compensation Scheme (FSCS).

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Bloom’s app security features

Here’s a whistlestop tour of Bloom’s money club app security features.

1. Identity verification

We use ID verification software to make sure nobody can set up or use your Bloom account except you. The software we use is trusted by the world’s biggest banks to protect their customers — so you can be confident it will protect you, too.

2. Anti-fraud software

Our fraud prevention software monitors every transaction that goes through Bloom, looking for possible fraud and criminal activity. Any suspicious activity will be flagged and blocked, so your money stays safe.

3. In-app payments

Every payment — contributions and payouts — are made through the Bloom app. That means nobody can change your payment details or tamper with scheduled payments, so there’s no delay in receiving your money.

4. Invite-only circles

You need to receive an invitation to join a Bloom Circle, so only people you know and trust can become part of your money club.

Why do I need to provide my bank details?

All Bloom Circle creators and contributors need to add their payment details to Bloom for one simple reason: so you can get paid!

Linking your bank account is simple and secure, and makes money transfer completely seamless.

Nobody can see or change your bank details except you — not even other members of the Circle.

How to join Bloom

Creating a Bloom Circle is easy. Just download Bloom from your app store and verify your identity.

You can then create your first Circle and invite your contributors. Each person confirms their identity and adds their bank details securely — then you’re good to go!

Create your first Circle in Bloom and start building your funds for what matters most with the people who matter most. Want to learn more? Find out how Bloom works and who Bloom is for.