Introduction to Group Money Safety

Collecting money for a group gift, a holiday, or a team event requires a higher level of trust than simply buying a coffee. When you are responsible for other people's money, or when you are contributing to a shared pot, you need to be certain that the platform you are using is secure, transparent, and reliable.

While generic payment apps are fine for one-off transfers, trusting a dedicated platform for group finances helps protect your relationships and your funds. Before you start your next collection, here are the five critical checks you must make to ensure you stay safe.

Understanding Payment App Risks

Payment apps like Cash App, Venmo, and Zelle have revolutionized the way we send money and manage group payments. However, as digital payment services become more popular, they also attract the attention of scammers and cybercriminals. The Federal Trade Commission has reported a rise in payment app scams, with users losing significant amounts of money to fraud, identity theft, and data breaches. In 2023 alone, scamming apps caused over $3.4 billion in financial losses across the United States, and Americans lost a staggering $210 million specifically to payment app fraud. The FBI has identified banking app phishing as one of the fastest-growing sectors of smartphone-based fraud, further highlighting the need for vigilance.

To protect yourself, it’s crucial to recognize that every transaction carries some risk. Enable two-factor authentication on your apps to add an extra layer of security, and always keep an eye on your transaction notifications for any unusual activity. Strong security measures are essential for group payment apps, including encryption and fraud protection. By staying alert and understanding the potential dangers, you can enjoy the convenience of payment apps while minimizing your exposure to fraud and scams.

1. Where is the Money Actually Held?

The most important question to ask is: “If the app disappears tomorrow, where is my money?”

Many informal collection methods rely on one person holding the funds in their personal bank account. This mixes group money with private spending, creating a risk of accidental misuse. Mixing funds also increases your potential exposure to misuse or fraud, while proper fund segregation helps minimize this risk. Even some apps simply act as a digital wallet without proper segregation of funds.

The Potje Solution: It is crucial to look for a service that separates user funds from the company’s own operational funds. Potje ensures that all collected money is held by a separate “Foundation for Third-Party Funds” (Stichting Derdengelden). This means the money is strictly ring-fenced and can never be touched by the company or its creditors.

2. Are Digital Payment Apps Regulated?

Never trust an app that operates in a regulatory grey area. Financial regulations exist to protect consumers from fraud and insolvency, and regulatory compliance is crucial for ensuring the app meets legal and security standards. Customer support should be reliable and available for resolving issues in group payment apps. The quality of customer support includes responsiveness and accessibility across various communication channels. If an app does not mention who regulates them or which banking standards they follow, it is a major red flag.

The Potje Solution: Safety is a top priority at Potje. The platform operates under the supervision of the Dutch Central Bank (DNB) and adheres to strict European financial regulations. This ensures that your group collection is managed with the same level of security and compliance as a standard bank account.

3. Does it Offer True Transparency?

A significant risk in group finances is the "black box" problem—where only the organiser knows who has paid and how much is in the total pot. This lack of visibility can breed suspicion and awkwardness among friends or colleagues.

To stay safe from social friction, you should check if the app provides a shared dashboard. Everyone involved should be able to see the progress towards the goal without needing to ask the organiser constantly.

The Potje Solution: Potje excels at transparency. By creating a shared pot, every participant can view the total amount collected and see who has contributed. This "social proof" not only builds trust but also encourages faster payments without the need for chasing.

4. Are the Fees and Business Model Clear?

“Free” apps often come with a hidden cost: your data. Some apps may also entice users with premium features or free trials, which can sometimes result in unexpected charges or unauthorized subscriptions. If an app does not charge a fee, they may be selling your transaction history to advertisers or third parties. To ensure your financial privacy, look for an app with a transparent business model. Users should understand all associated costs, including transaction and withdrawal fees, to avoid unexpected charges. Transparent fees are crucial to avoid hidden costs in group payment apps, ensuring users are fully aware of what they are paying for.

The Potje Solution: Potje operates on a fair and transparent success fee model, rather than selling user data. You pay a small, fixed one-off fee based on the size of the pot (e.g., a small fee for a pot up to €500). This transparency ensures that you are the customer, not the product.

5. Is Payment Security Standardised?

Finally, check how the actual money transfer happens. Avoid apps that ask you to share login credentials or use unverified third-party scraping tools. You should only use apps that integrate with recognised, secure payment systems like iDEAL, Bancontact, or official Open Banking protocols (“Pay by Bank”).

The Potje Solution: Potje integrates directly with major European banks using secure, standard payment protocols. This means you can contribute to a pot using your own trusted banking app, ensuring your sensitive financial details remain protected at all times.

When using banking applications, mobile payment apps, or other digital payment apps on your device, always prioritize security. These apps typically use a unique code for multi-factor authentication to verify your identity and protect your transactions. With these features, you can safely send payments and receive money. Remember to keep your device secure—enable biometric authentication or two-factor authentication and avoid vulnerabilities to prevent unauthorized access. Robust multi-factor authentication (MFA) enhances security in payment applications, providing an additional layer of protection.

Linked Accounts and Security

Most payment apps allow you to link your bank account, debit cards, or credit cards for seamless money transfers. While this makes sending and receiving money easier, it also means your financial information could be at risk if your account is compromised. Users should consider using credit cards for transactions instead of debit cards for better fraud protection, as credit cards often offer more robust security measures and dispute options.

To keep your linked accounts secure, always use unique passwords for each app and enable biometric authentication or multi-factor authentication whenever possible. Avoid connecting your accounts when using public Wi-Fi networks, as these are prime targets for hackers looking to steal sensitive data. Data encryption, including SSL/TLS, protects sensitive information in group payment apps. By taking these precautions, you can help ensure that your money and personal information remain protected during every transaction.

Payment App Scams: What to Watch For

Scam artists are constantly developing new tactics to exploit users of payment apps. Some of the most common payment app scams include phishing attacks, fake sales, and urgent requests for immediate payment from unknown sources. Scammers often insist on payment through apps before delivering goods, which is a red flag. You might receive text messages or emails that appear to be from a trusted company or person, asking you to send money or provide sensitive information. Scammers may also pose as a friend or family member in trouble to convince victims to send money. Once money is sent through payment apps, it becomes virtually impossible to recover.

To stay safe, never respond to unexpected requests or click on suspicious links. Regularly monitor your accounts and transaction notifications for any signs of unauthorized activity. If you suspect you’ve been targeted by a scam, contact your financial institution immediately and report the incident to the relevant authorities. Staying vigilant is your best defense against payment app scams. Cybercriminals frequently employ social engineering tactics to execute payment app scams, making it essential to remain cautious.

Public Wi-Fi Precautions

Using public Wi-Fi networks to access payment apps or complete online transactions can put your sensitive information at risk. Hackers often target public Wi-Fi to intercept account numbers, passwords, and other financial information, making it easier for them to commit fraud or steal your money.

To protect yourself, avoid sending money or accessing your payment apps when connected to public Wi-Fi. Instead, use a secure, private network or a virtual private network (VPN) to encrypt your data and keep your transactions safe. By taking these simple steps, you can reduce your risk of falling victim to payment app scams and ensure your financial information stays secure.

Conclusion

Trust is the foundation of any successful group activity. By verifying where the money is held, checking for regulation, ensuring transparency, and understanding the fee structure, you can collect money with total peace of mind.

Don't risk your reputation or your friends' money on insecure methods. Choose a platform that is built specifically for safe, transparent group saving.

Ready to start a secure collection? Create your first Potje today and experience the safest way to save together.