Frequently Asked Questions about Mobile Payments for Seniors

It’s natural to have questions when trying something new. Here are answers to some of the most common queries seniors have about using digital wallets.

Is my money truly safe in these apps?

The companies behind these apps use sophisticated technology, like data encryption, to protect your account information. In that sense, the technology itself is very secure. The biggest risks almost always come from what is called “user error”—either sending money to the wrong person by mistake or being tricked by a scammer into sending money willingly. By following the safety rules we discussed, you can dramatically reduce these risks and use the apps safely.

Do I absolutely need a smartphone to use these services?

Not always, but it helps. Venmo is designed almost exclusively for smartphones; its website has very limited functions. However, both Zelle and PayPal have fully functional websites that you can use on a desktop or laptop computer. If you are more comfortable on a computer than a phone, you can still access the power of Zelle through your bank’s regular website and the full suite of PayPal’s features at PayPal.com.

What happens if I make a mistake and send money to the wrong person?

This is a difficult situation, and the answer depends on the service. With Zelle, because the transfer is a direct bank-to-bank transaction, it is extremely difficult, and often impossible, to reverse. You should contact your bank immediately, but they may not be able to recover the funds. With Venmo and PayPal, you can try sending a request to the person for the money back. If they are honest, they may return it. If not, you can contact customer support, but they cannot guarantee the return of your money in a case of user error. This is why prevention—triple-checking the recipient’s information—is so incredibly important.

Are there limits on how much money I can send?

Yes, and these limits are in place for your protection. Each service, and sometimes each bank, sets its own limits on how much you can send per transaction and per week. For new users, these limits may be lower and can increase over time as you build a history with the service. For example, a typical limit might be $500 per week. You can find your specific limits within the app’s settings or on your bank’s Zelle information page.

Will using these apps affect my Social Security or my taxes?

This is an excellent question. For most personal uses, the answer is no. Sending a cash gift to a relative or getting paid back for your share of dinner are not taxable events and will not affect your Social Security benefits. However, the situation changes if you begin to receive money for goods or services. If you sell items at a craft fair, get paid for a part-time job, or collect rent and the payments come through these apps, that is considered income and is generally taxable. The IRS has rules requiring these platforms to report payments for goods and services. If you plan to use these apps for any business-like activity, it is wise to speak with a tax professional to understand your obligations.