How to send money as a gift safely

Gifting money is a popular and convenient way to celebrate special occasions or show love to friends and family. While technology makes it easy to send money as a gift, it also poses potential risks. Sending money safely makes sure the gesture doesn’t lead to unexpected problems like scams or fraud.

This guide talks about how to send money as a gift and offers strategies and safety precautions for each delivery method.

Choose a way to give money as a gift

Whether looking to send money securely online or utilizing traditional transfer methods, it’s important to consider the recipient’s location, how quickly they need the money (or how quickly the sender wants it delivered), and the delivery method's security practices.

Here are the potential pros and cons of different ways to give money as a gift.

Bank account transfers

This method involves moving funds directly from one bank account to another, either within the same institution or across different ones. Common types of bank transfers include Automated Clearing House (ACH) transfers and wire transfers.

Some potential pros may include:

• Secure. Handled by the banking institution, who typically employ stringent security protocols.
• Useful for large sums. Suitable for significant sums due to high transfer limits.
• Free internal transactions. Many banks offer free transfers for accounts at the same institution.

Potential downsides may include:

• Processing time. ACH transfers can take several days to process, which might not suit urgent needs.
• Detailed information. The sender and recipient need to provide sensitive information, like routing and account numbers, posing potential security risks if mishandled. Plus, the sender may not have the recipient’s bank information, and asking for it may take away the surprise of sending a gift.

Peer to peer (P2P) payment apps

The P2P payment method allows people to send money to each other through apps. P2P apps allow users to transfer money directly from their account balance on the app or via linked payment methods (such as a bank account, debit card, or credit card) to other users. Many P2P apps also double as international money transfer apps. While some may offer the ability to send money internationally, it’s important to check for associated fees.

Some potential pros of using P2P apps may be:

• User-friendly. Intuitive interfaces can make it easy to send money to someone with just a few clicks.
• Low or no fees. Many apps don’t charge transaction fees for P2P transfers, especially when funded by existing app account balances.
• Limited information needed. Generally, users can send to other users by just using their name, phone number, or email to find their account.
• Instant transfers. Some platforms ensure recipients get peer to peer payments almost instantly.
• Personalization. When sending money with a P2P app, users can typically add a message or customize with emojis or animations to add a personal touch.

Potential cons may include:

• Spending caps. A limit on the amount one can send may restrict large transfers.
• Recipient must have an account on the app. While sign-up processes and requirements may vary, one can typically only send to someone else if the recipient also holds an account on the same app.

Learn how to send and receive money with PayPal.

Cash

For people less familiar with the latest technology, using cash is an easy way to gift money. Cash can be handed directly to the recipient or sent via mail service.

Potential benefits may include:

• Simple. No need to use banks or apps. If the sender has cash on hand, any trips to the ATM or physical bank location aren’t needed.
• Private. Transactions are unrecorded, securing personal details and skipping the need to share or upload account information.
• Creative. Placing cash in a card, decorated envelope, or a note can add a personal touch, offering a more personal way to gift money.

However, it’s important to consider potential negatives associated with gifting cash:

• Loss or theft. Cash can be lost or stolen with no option for recovery.
• Long-distance challenges. Sending cash by mail can be slow, hard to track, and potentially unsecure.

Gift cards

Gift cards are available as physical cards in retail stores or as virtual gift cards on secure platforms. Sending a gift card online removes the hassle of physical handling and shipping, and the recipient can receive the gift almost instantly.

Potential upsides of using gift cards may include:

• Targeted use. Gift cards can be specific to certain stores or services, ensuring they get used as intended.
• Personal connection. Giving someone a gift card to a store that they like or have a connection to may add a personal and thoughtful feeling to the gift by showing an understanding of the recipient’s likes or wants.

There may be potential negatives to consider, such as:

• Limited use. The recipient may not have use for a gift card for specific stores.
• Potential fees. Some gift cards may come with hidden inactivity fees or fees to load money on the gift card.

Learn how to send gift cards with PayPal.

Considerations to safely send money as a gift

To send money as a gift safely, be sure to explore effective fraud prevention methods that protect personal information and ensure the gift reaches the recipient securely.

Use reputable platforms with secure features

Choose platforms that facilitate secure online payments by offering:

• Encryption
• Fraud monitoring and purchase protection
• Secure login standards like a policy on strong passwords, use of MFA, or passkey availability.

Try to recognize and avoid scams

Stay aware of potential scams and fraud, like scammers impersonating friends and family. Learn to identify fake messages and avoid sending money through unverified channels, such as online forums and marketplaces.

Double-check recipient information

Before sending money via any delivery method, confirm the recipient’s details such as name, account number, and email address. This ensures the money reaches the correct person and removes the challenge of retrieving funds from the wrong recipient.

Don’t share personal information through unsecured channels

For safe money transfers, avoid sharing private information, such as passwords, account details, or verification codes. Financial institutions never request this information via unsecured channels like text messaging, email, or social media. Always use secure, official platforms for safeguarding information.

Learn how to send money with PayPal.