Peer-to-peer (P2P) is defined as the distribution of computing, networking, or payment architecture that partitions tasks or workloads between peers.
In this instance, peers are equally privileged, equipotent participants in the application. Peers make a portion of respective resources, such as processing power, finances, etc. directly available to other network participants, without the need for central authority.
P2P payments include popular money transfer apps such as like Venmo, PayPal, and Cash App, which allow users to send one another money from their mobile devices through a linked bank account or card.
These services also make splitting bills with friends and family painless, something that cannot be accomplished via traditional payments mechanisms.
Though all of the major P2P systems encrypt, or shield, your financial information, some have been subjected to hacks and scams.
Are P2P Systems Safe?
Today, many apps come equipped with fraud monitoring and support teams to help resolve unauthorized transactions. However, there are several ways to monitor for abuse.
This includes adding or updating your PIN regularly to prevent hacking. This number, like any password should be changed frequently.
Additionally, all P2P payments include notifications or confirmations of transactions. These should be saved when possible to track and record your payments.
In general, it is best to pay and receive money with only people you know. This limits the scope of most scams as it shields you from dealing with malicious actors in most situations.
Finally, always link with an outside and secure account that has its own security protocols. Most P2P services require this regardless.