In these cases, the Federal Deposit Insurance Corporation was able to partially cover funds stored in bank accounts while worried customers were running to their local ATMs to withdraw their money en masse. The CFPB warning comes after the recent string of high-profile bank failures involving Silicon Valley Bank, Signature Bank, and First Republic Bank. The US government watchdog for consumer protection mentions the collapse of crypto platforms FTX and Voyager in 2022, which led to significant harms to crypto consumers who lost hundreds of millions of dollars. In the end, the CFPB warns, their inability to offer proper, bank-like insurance could lead to economic instability issues. The so-called "P2P payment" apps such as Venmo, Paypal and Cash App are "nonbank" organizations that offer payment services tailored for the digital market. In the US alone, over three-quarters of adults and 85% of younger consumers (18-29) have used at least one payment app, leading to a transaction volume of approximately $893 billion in 2022 alone. The Consumer Financial Protection Bureau (CFPB) recently released a report on payment apps, a means to transfer funds which is being increasingly used also to store money. But customers are likely using those apps wrong, the US government warns, and they could face a total loss in case of corporation failure or new financial crises. The big picture: Payment apps have become one of the most popular ways people spend and move their money around these days.
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