Master the art of secure transactions: 5 safe ways to pay online
August 22, 2024
Any information you share online has the potential to fall into the hands of cyber criminals — and online payment information is often a top target for malicious hackers looking for an easy payday. Knowing that can make anyone feel a little uneasy when checking out for an online purchase or sending money to friends or family.
Luckily, many services that facilitate online payments, like PayPal or Venmo, implement tough security measures and monitor for misuse to try to keep your data and money safe. Of course, this is only half the battle — the other half relies on users to make safe choices while entering their payment information.
If you’re looking for safe ways to pay online and tips for safeguarding your sensitive financial data, our guide will give you all the information you need to feel secure the next time you make an online transaction.
Are online payments safe?
Any time you share sensitive data online, you risk having that data fall into the hands of cyber criminals, and online payments are no exception.
Whether an organization’s customer database gets compromised, you connect to a public Wi-Fi network that a malicious actor has access to, or you accidentally download malware on your laptop that lets hackers monitor your activity — these scenarios can all easily end with your information landing in the wrong hands. Once these hackers have your private financial information, they could potentially access your credit card or banking accounts and commit financial fraud.
That said, many digital payment services work hard to safeguard their platforms and shore up any potential security gaps that hackers might exploit. Here are some common security features that the best services will use (or let you add on):
End-to-end encryption: Encryption prevents third parties from accessing data while it's transferred from one end system or device to another, turning it into scrambled code while in transit. For example, if you enter your credit card information into a payment method that uses encryption, only you and the vendor will be able to read your information; anyone who tries to intercept it will only see jumbled code
Tokenization: This security tool turns your payment information into a unique code during each transaction, so your real credit card details aren't accessible to potential hackers.
Multi-factor authentication (MFA): MFA adds an extra hurdle to your logins for online accounts, like on banking or credit card platforms. Along with your usual login process, you’ll also need another piece of information, like a code sent to your phone via SMS or through an authentication app, to prove it's really you trying to log in.
Biometric authentication: Similar to MFA, this authentication method adds another layer to your logins — specifically physical data, like a scan of your face or your fingerprint.
Safest online payment methods: Pros and cons
Knowing how to pay for things safely online is important because it helps you protect your money and personal information. There are different ways to pay, each with its own security features and risks. By understanding these, you can choose the safest option that works best for you and reduces the chance of someone stealing from you or accessing your accounts without permission.
Here are some of the most secure payment methods available online:
1. Credit cards
Using your credit card to make a purchase is especially straightforward: All you have to do is enter your information at checkout. While this may not sound like the most secure option, the safety of using these cards lies in the policies set out by your credit card issuer.
If someone ever steals your credit card information, you can dispute the charge with your creditor for a refund and cancel your card. Most creditors have a zero-liability policy, meaning they will not hold you financially responsible if someone commits fraud with your card and makes unauthorized purchases. While reporting a compromised credit card and obtaining a new one can cause some headaches, you can at least rest easy knowing you're unlikely to lose money as a result.
2. PayPal
PayPal is a widely used payment option that millions of merchants offer. It boasts a lot of security features to protect its large user base, like end-to-end encryption, 24/7 transaction monitoring, and fraud detection systems. The platform also provides privacy not commonly found with other payment methods; only the user's email address is disclosed to the recipient, making this a semi-anonymous payment method.
You might wonder if PayPal is safer than a credit card. Overall, they have similar security measures and look for anything weird or unusual to make sure nobody is using your account who shouldn't be. Plus, you can use a credit card with PayPal to blend both options’ security features. That said, since PayPal attracts a lot of users, it also attracts hackers hoping to dupe customers through phishing scams or other hacking methods.
3. Digital wallets
If you have a smartphone, laptop, or tablet, you might consider using a digital wallet, like Google Pay or Apple Pay. These services use encryption and tokenization to securely store your financial data on your device, allowing you to safely make payments either online or in person without physical contact.
You can use tap-to-pay for in-person purchases or click on a button for the digital wallet at checkout with merchants who offer it to avoid manually entering your card details. However, fewer merchants accept digital wallets compared with other payment services.
4. Venmo
Venmo is a popular peer-to-peer payment app known for its ease of use and social integration features. This payment service uses security features like encryption and MFA to protect your money transfers.
Some people worry about their privacy when using Venmo because the app might show their payment activity to others, but you can easily change this through your settings or as you send money. Also, Venmo only allows people to withdraw up to $1,000 per day, which could make it difficult to use for larger transactions. Overall, Venmo is better suited for smaller, everyday transactions.
5. Virtual Credit Cards
Virtual credit cards, like IronVest offers, are a helpful way to make online shopping safer. These cards create a unique number for each purchase that connects back to your legitimate credit card. The vendor you make the purchase with can only ever see the fake number, keeping your card details secure and lowering the risk of fraud.
While using virtual credit cards may require some learning, they are a great tool to protect against unauthorized charges. Not all merchants accept them yet, but they are becoming more popular due to the extra security they provide for online shopping.
Payment methods to avoid
Some payment methods are more vulnerable to cyber criminals than others because they lack security features like encryption, tokenization, and fraud protection measures. Here are some payment options that offer lackluster security and are worth avoiding if possible:
1. Direct wire transfers
When you're making payments online, keep in mind that direct wire transfers, which companies like Western Union or MoneyGram usually handle, are one of the least secure online payment methods. Once you initiate a wire transfer, it's difficult to reverse it, and you are on the hook for any transactions you make. This can make it hard to recover lost funds due to scams or unauthorized transfers.
2. Debit cards
Debit cards are riskier than credit cards when it comes to fraud because thieves can use them to take money directly from your bank account. While credit cards usually have protection against fraud, debit cards offer less protection, making it harder to retrieve stolen money if someone compromises your debit card.
To limit your liability and help you get your money back, it's important to tell your bank right away if you see any unauthorized transactions on your debit card.
3. Online retailers with poor security measures
Some online shops have weaker security measures when it comes to payment systems. Retailers that don't require MFA, don't have a minimum password length, or don't provide password guidance are typically less secure to use.
4. Social media accounts
Linking your social media accounts to online platforms can be convenient for logging in and making payments. But if someone hacks your linked social media account, it could lead to unauthorized access or even theft of your payment methods.
5. Prepaid Debit Cards
While prepaid debit cards may look similar to debit or credit cards, they do not offer the same security features. For example, if you lose a prepaid card or someone steals it, there is typically no liability policy that helps you recoup lost funds.
Tips to avoid scams and fraud in online payments
If you rely on digital transactions to make purchases or pay bills, it's important to know how to protect yourself from scams and potential fraud. Here are some valuable strategies and security measures you can implement to better protect your financial information:
Use a secure connection for transactions
Before you complete any financial transactions online, make sure the network you’re connected to requires a strong password and uses encryption to protect your data. Steer clear of public Wi-Fi, as these networks often lack these features, making them a big target for cyber criminals.
Purchase from reputable and safe websites
If you shop online, it's best to stick with well-known retailers or check the legitimacy of lesser-known sites through consumer reviews to avoid potential fraud. You can also look for trust seals in the footer of the page or at checkout, which indicate that a certified security provider has reviewed the site’s safety features and deemed it secure.
Frequently update your mobile device and computer
Make sure to regularly update your computer and mobile devices with the latest software versions. These updates contain security patches that can protect your devices from malware infections that may steal your payment information. It's also important to use reliable antivirus software to enhance your security and sniff out viruses from cyber criminals.
Be wary of unsolicited requests for information
Beware of phishing attempts where scammers use fake personas in emails and text messages to try to get you to reveal sensitive information. Don't give out your personal or financial details through these channels. Also, always make sure that payment requests, whether they arrive via email, text, or within an application, are genuine by checking the URL or visiting the official website directly instead of clicking links in these messages.
Review your permissions for any payment apps and wallets
If you use a payment app or wallet on your mobile device, check your permission settings to ensure you’re limiting what information the apps can access, like your contacts or phone microphone. Only give these apps access to what's absolutely necessary to reduce your data exposure.
Embrace enhanced security with Ironvest’s virtual cards
While navigating an online payment can sometimes feel a little daunting, knowing you’re using a secure payment method can give you some peace of mind. If you want to enhance your online payment security further, consider Ironvest.
Ironvest provides features like virtual credit cards and biometric authentication to ensure that only you can access and use your most sensitive financial data. This integration of advanced security measures makes Ironvest an invaluable tool for safe online payments. Start with Ironvest today and experience a secure, worry-free online shopping journey.