Are you concerned that PayPal+Bump creates additional risk? Try it out and let me know. I am not an expert in payments, but it shouldn't be any riskier than PayPal alone. In fact, I would argue in several ways it is safer (can't send money to the wrong person because of a typo for example).
1) The wrong email address because you have an incorrect entry in your address book. It's not just a typo, but a typo for a real email address.
2) A server/software issue that causes the bump to go somewhere else. (It's my understanding that the two devices being bumped connect through the vendor's servers.)
Re 1) I have used the previous PayPal app a lot and I found myself typing in emails more than I pulled them out of my address book. My address book has mostly phone numbers, emails are rare. I think this is because of Gmail's autocomplete; it reduces my need to save people's email addresses if I have ever sent or received email with them. Also, you are assuming you are giving money to someone in your address book, there are lots of use cases where this is not the case. But, true point if this is how you would use the app.
Re 2) There are multiple confirmation steps you go through after the bump. First, our API requires that both people say Yes to connect to the other person (PayPal uses your email or phone number, whatever the other person logged in with). PayPal has a second confirmation screen where you review the transaction before sending money. So while it is possible you could be matched to the wrong person (although very unlikely), you would both have to hit yes and then reconfirm you want to send money to that person. Bump does not connect you to anyone until you say Yes, there is a safety net.
Neither us or PayPal want to create a system where you send money to the wrong person. No system is perfect, mistakes have to pile up on top of mistakes for this to happen and the user always has control.
Good point. For what it's worth, I've done a little bit of work with the Bump team. Given their talent and technology backend, I suspect it's very unlikely that they've ever made a mistake. Also, they user is always prompted, "are you sure you want to exchange X with Y" before the transaction proceeds so you can be sure the bump happened with the person you expected. For more, see the second FAQ here: http://bu.mp/faq.html
