More than three quarters of adults have used a payment app, called a P2P or peer-to-peer or person-to-person app.

Widely used nonbank payment apps include PayPal, Venmo, and Cash App. The apps can be used on a computer or mobile device to send Money to someone else without writing a check or handing over cash.

Young adults use payment apps even more frequently. Eighty-five percent of consumers aged 18 to 29 have used one of these apps, according to a Consumer Reports survey.

The Consumer Financial Protection Bureau offers the following information on the pitfalls of using payment apps:

Money stored in nonbank payment apps often isn’t protected by federal deposit insurance

Nonbank payment apps help you move money into and out of a linked bank account, credit union account, or card account. They also let you store money inside the app. Money you receive usually stays in your payment app account until you move it to your linked account.

Keeping money inside your nonbank payment app might feel the same as a keeping it in a traditional bank account with deposit insurance. You can check your balance and review transactions. However, the money in your app might not be held in an account at an FDIC member bank or NCUA member credit union so it may not offer federal deposit insurance.

If a payment app’s business fails, what happens next is often unclear

Apps can be set up in different ways. The app company may invest your money in loans and bonds – instead of keeping the money in a bank or credit union account – and earn money on it. The payment app’s business could have issues from investment losses, interest rate changes, and liquidity problems.

Your user agreement might be confusing, unclear, or silent on where your money is being held or invested. It may not explain whether your money may be insured at a bank or credit union, and what happens if the nonbank payment app’s business fails or files for bankruptcy.

Deposits in a bank or credit union is protected. The Federal Deposit Insurance Corporation and National Credit Union Administration protect deposits up to $250,000. If your bank or credit union fails, you still have quick access to your money.

If the nonbank payment app’s business fails, your money is likely lost or tied up in a long bankruptcy process.

Some apps offer ‘pass-through’ insurance, if you take additional steps

Some apps may claim to provide pass-through insurance through a bank or credit union for customers who sign up for additional services.

Pass-through insurance means you’re insured against bank or credit union failure where the app holds the money for you. However, it doesn’t insure you against the failure of the payment app company.

So, if you use payment apps, like many people do, move money out of payment apps as soon as possible to an insured account. The CFPB suggests using this link to send yourself an e-mail reminder.