5 ways to safeguard yourself from fraudulent transactions through mobile payment apps.

Instead of writing a check, many Americans prefer to send money to loved ones via their smartphone payment app due to its convenience and ease of use. However, there's a significant concern about fraud.

The mobile app payment industry is experiencing a sharp increase in consumer complaints, as fraud rates among mobile payment apps are three to four times higher than traditional payment methods, making them a prime target for scammers, according to Kia McCallister-Young, director of America Saves, an initiative of the Consumer Federation of America.

According to McCallister-Young, scammers target people of color and low-income earners at higher rates than other consumer demographics. The CFA found that among Black and Latino consumers, two out of five have been targeted by a scam and one out of five have lost money due to a scam.

Experts warn that mobile payment apps can be appealing to scammers due to the lack of fraud protection compared to debit and credit cards. Scammers can easily link a stolen credit card to a payment app to make purchases, set up transactions, and cancel them before they are processed, or send an email claiming an overpayment and requesting a refund. The quick nature of money transfers through apps makes it challenging to detect fraudulent payments.

"The beauty of mobile payment apps is their instant use, but the challenge lies in retrieving the funds, so it's crucial to ensure the recipient is correct before making a transaction," stated Ted Rossman, senior industry analyst at Bankrate.com.

The type of online payment system you employ may affect your likelihood of losing money if you fall victim to fraud.

Here are two income-oriented strategies to safeguard and expand your wealth during the market's turbulent ride.

The Better Business Bureau's 2021 report revealed that the median dollar loss for online purchase scams involving PayPal was $90, which is significantly lower than the median losses reported for Zelle, Venmo, Apple Pay, Google Pay, and Cash App. PayPal can be linked to bank accounts or credit cards, while Zelle only allows bank-to-bank transfers and cannot be linked to credit cards. These differences in payment methods can impact the level of protection provided.

Experts recommend these five tips to avoid being scammed regardless of which mobile payment app you use.

1. Ensure that you have the correct contact information before transferring money to someone you know.
2. Enable security features on the app and your smartphone, such as multi-factor authentication, which may require a PIN, fingerprint, or face recognition.
3. Secure your smartphone with a strong password, biometric features, or two-factor authentication.
4. Link your mobile payment app to a credit card instead of a bank account or debit card.
5. And always check that the money transfer has been completed.

This story originally appeared on the Today Show

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