Ready to Pay with Your Phone?

By Christina Wood

If you blinked, you might have failed to notice the people around you exchanging money via their smartphones. That table of millennials and gen Zers staring intently at their phones instead of talking to one another over coffee? That may not be a harbinger of societal breakdown caused by smartphone addiction. They might simply be splitting the bill.

Perhaps your housekeeper asks you to Venmo her. (This payment app’s name has become a verb.) Maybe the cosmetics store you shop online offers PayPal as a payment option. Or the Starbucks barista asks if you want to tap your phone at checkout, to use the coffee chain’s app to pay for your purchase. All are ways that you can now use your phone to make a transaction.

Over the last year, paying by phone—an idea in the works for years—has taken off. “In 2018, over four million people in the US were registered to use domestic money transfer via their mobiles,” says Nick Maynard, lead analyst at Juniper Research. The trend promises to increase—rapidly. “Globally,” he says. “The volume of domestic money transfers via mobiles will exceed 203 billion in 2024. Up from 130 billion in 2019.”
If you are thinking about taking the phone payment plunge, here is a guide to getting started.

Is it safe to Venmo?
If you haven’t yet downloaded a payment app and used it to pay the sitter or receive a payment from a client, you’ve probably experienced some pressure to do so. If you are hesitating over privacy concerns, you aren’t alone. According to Statista, that’s one of the main reasons people resist this technology. Given that data privacy breaches are epidemic, it’s hard to know whom to trust. According to Maynard, most payment app providers are trusted financial institutions. Usually, he says, “transfer apps are either bank or payment network led, which means privacy isn’t a massive concern.”

That’s not to say you should let your guard down entirely. Venmo is wildly popular, in no small part because of its social aspect. When you pay someone, your transaction—along with the cute note and emoticons you attached to it—are shared with your Venmo-using friends or, if you allow, the Venmo-using public. You can easily set your transactions to “private,” but many people don’t. Facebook Messenger, too, is a popular way to transfer money to friends. But given that Facebook has been plagued with privacy violations, breaches, and failures for years, you may want to consider other options.

Meet the Apps
There are so many options for paying with your phone that most people just do what everyone else is doing. This may be why Venmo’s social strategy is working so well. But you can be the one who applies the social pressure. That way you get to pick the app you use—at least to send money. We broke down seven of the most popular mobile payment apps to help you decide where to start.

Christina Wood is a freelance writer based in North Carolina. You can find her online at She writes about technology at

PayPal, founded in 1998, is one of the oldest of the Internet financial institutions. It is also the one most accepted by merchants. It was, for a time, owned by eBay because enabling safe payments was essential to the success of that online marketplace. The PayPal mobile app (App Store
or Google Play) makes sending cash to friends and family super easy—and free. It is also a practical way to get paid by a client or to pay a contractor. (A fee is charged for business transactions.) Because there’s no limit on how much money you can transfer once your account is verified, you can easily use the app to fund a kid in college for incidentals such as books and other supplies, trips home, and late-night pizza runs. It lets you send money overseas, which some mobile apps do not. The “Money Pools” feature is handy for collecting money from a group for a family reunion or other event. You simply set up a web page, which you can share so people can easily find and pay you. You can also post a photo on the page.

Pros: Feature rich. Complete. No limit on transfers. Widely accepted and used.

Cons: Some people find the many options and verification complicated. Fees are charged for some transactions: 2.9 percent plus 30 cents per transaction.

Venmo, owned by PayPal, is wildly popular—and getting more so. Even if you prefer not to shout your spending habits out to the world, you will probably find yourself using this app because so many people do. “Venmo had over 40 million monthly active users in April 2019,” says Maynard. “It processed $21 billion in transactions in the first quarter alone. That’s an increase of 73 percent year over a year.”

Venmo is fun and simple, which is probably why everyone uses it. Much of its charm comes from the campy messages and emoticons you can attach to money exchanges. It is a lot more fun than just handing someone $20. The app is designed for small transactions between friends, such as paying someone who picked up the lunch tab or covering gas money on a road trip. It’s easy to get started, although your weekly transactions will initially be limited to $299.99. Once you verify your identity, that limit rises to $2,999.99. If the oversharing worries you, change the default to private before you start exchanging money.

Pros: Fun, simple, social way to exchange money with friends. Easy to get going.

Con: Unless you change your default to private, everyone will know you split the tab or paid your kid’s rent.

Mezu is a new player in this space. Its raison d’être is anonymity. If you want to exchange money with someone without sharing your personal data, a credit card number, or anything else, this is the way. Say, for example, you buy a piece of jewelry at a craft fair. You don’t want to exchange contact information with the merchant, but you don’t have cash. Mezu generates a four-digit code. You give that code to the merchant, and she enters it into the app on her phone. She gets her money. She doesn’t even know your name.
If you want to connect to friends, you can also do that. Mezu will give you (and the friend) $5 for every friend you convince to download and use the app.

Pros: True anonymity from a peer-to-peer payment app, which is rare. Very much like using cash. Gives you money to join!

Con: It’s still new, so some merchants may not have the app yet.

Square Cash
You ate in a restaurant, or you bought something at a street fair. The merchant swiped your card using a tablet or mobile phone and a card reader. You just used Square, which has taken over point-of-sale in recent years. Square has a peer-to-peer payment app, too. It’s called Cash, and it’s delightfully simple and easy to use.

You sign up and connect a debit card, and you’re ready to go. When you send cash to someone, he or she gets a link, downloads the app, and receives his money. You can send up to $250 a week with no more effort than that. If the app becomes your go-to payment method or you want to send your child at college money for rent, you will probably have to verify your identity with a social security number or the like to raise your weekly limit.

Pros: Comes from Square, which many merchants trust with payments. Easy and simple to use.

Con: Weekly sending limit of $250.

Google Pay
You can do just about every sort of payment or money transfer—and some other things—using Google Pay. Pay at in-store checkout kiosks by tapping your phone. Send people funds to split a check or pay for services like dog walking or house cleaning. You can enter an assortment of payment methods (credit card, debit card, PayPal account, cell provider, bank account) and decide how to pay when you spend, or you can set a default method if you don’t have time to fuss with choosing. Google Pay works with many merchants—such as Airbnb, Starbucks, and Dunkin’ Donuts—so you can zip through checkout without worrying that your payment method will fail. Your recipient will get a link, which will ask for a bank account for depositing the funds. You can even store your loyalty cards on Google Pay and lighten your physical wallet.

You might already use this app if you have made a purchase from the Google Play store. In that case, just open it to send money. There is an app for Android and iPhones. Or you can go online to

Pros: Thorough and complete money solution, accepted by many retailers. You might already have it if you are an Android user. Your recipient does not need to have the app. No fees. Transaction limits are huge.

Con: A bit complex.

Apple Pay
The dream here is that you can go out carrying only your phone—or just wearing your Apple Watch—and be able to buy what you need and send people cash. Many merchants accept Apple Pay. (See the list on the Apple website.) You can also use the app to exchange money with friends. Your iPhone’s messaging app can do peer-to-peer payments, which is darn handy if that’s where most of your communications happen. If you have an Apple Watch, all of that is scrunched down to fit
on your wrist, which is a pretty serious sci-fi lifestyle upgrade. The transfer limits are big enough to handle most everything you are likely to do.

Pros: Easy to send payments using message app. Works on Apple Watch. Accepted by many major retailers.

Con: Only works on iPhones and Apple Watches.

One of the more popular payment apps, Zelle is often offered as a peer-to-peer solution by banks. You may have encountered it in your online banking portal or your bank’s app. It works best if both your bank and the recipient’s bank are connected to Zelle or if you have the recipient’s bank account number. In that case, your money will transfer in minutes. When you send money to a friend’s mobile number—which is how most of the other apps here work—the transfer takes days. That’s a lot of time to wait for brunch repayments from your friends, so Zelle is best used to pay people with whom you have frequent financial interactions.

Pros: Embraced by, and often included in, your bank’s online portal and app.

Con: Wants you to enter bank account information or wait for slow transfers. DW

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