The news: The Consumer Financial Protection Bureau (CFPB) has cautioned consumers against storing money in payment apps such as Venmo, Cash App, and PayPal. Why it matters: The watchdog warns that these funds are not automatically insured by the federal government and could be lost if the companies fail. It's advising users to transfer funds from payment apps to bank accounts, such as high-yield savings accounts insured by the FDIC, as a more secure option for storing money. What the numbers say: An estimated 75% of Americans, and 85% of adults aged 18 to 29, have used popular peer-to-peer apps like PayPal, Cash App, and Zelle. The apps handled $89B in transactions last year, an amount expected to rise to $1.6 trillion by 2027, according to a CFPB report. The warning comes as the digital payments market expands rapidly, reaching an estimated $375B by 2030.
|
