With so many malicious crimes targeting online payments as well as identity theft, cybercrime is no doubt on the rise these days, people lose their funds when making payments through a variety of numerous services that accept online payments, personal information can be stolen information and various confidential data. In December 2022, researchers conducted a certain assessment that found that bank card fraud losses in the United States would be $165.1 billion over the next decade. Meanwhile, Insider Intelligence notes that “cardless” payments, including online transactions, account for the majority of fraudulent transactions, with the key goal being to steal funds and sensitive information. But that doesn’t mean you can’t do certain things to keep your data and your money safe when shopping online. The good news is that there are many useful and effective payment security solutions and numerous in-person and online payment methods with technology and robust features to fully protect your personal information.
Safe and effective online payment methods
To keep your online shopping transactions as secure as possible in 2023, consider the following online payment methods.
Credit cards are generally the safest form of payment when shopping online. Credit cards actively use the most effective online security features, such as encryption and fraud detection, to protect your account and personal information. The Fair Credit Billing Act (FCBA) limits legal liability for fraudulent credit card charges to a maximum of $50. This means that even if a hacker or thief gets your credit card number, you won’t be part of their purchases, no matter how much they spend.
Automated Clearing House (ACH) payments allow you to securely transfer money directly from your bank account to another bank account. This payment network implements several effective security features, including encryption and access control to protect your banking information.
Saved payment credentials
According to the PYMNTS How We Pay Digitally 2022 survey, 80% of online shoppers will use payment information stored in various online accounts to make online purchases in 2022. Compare your credit card and bank account information from last year. To make purchases with saved payment information more secure, you should choose a fraud-protected credit card as your payment method.
A secure face-to-face payment method
Thanks to the active development of modern technologies, personal payments are more secure than ever, especially when using mobile devices when making payments online. The following private payment methods have advanced security features to completely protect your confidential information and funds when making payments.
Credit card with an EMV chip
You used to have to swipe your credit card through a payment terminal to pay for a purchase, but nowadays most credit cards are actively using EMV chip technology instead of magnetic stripes. Using modern EMV technology, the payment terminal reads the card and receives the unique encrypted information sent by the card’s chip. This technology effectively helps prevent fraud because the unique cryptographic information is different for each transaction you make when making a payment. Over the last decade, this technology has developed rapidly in the United States of America and around the world, the very phenomenon of credit card tokenization has become extremely popular and widespread, because tokenization provides full protection during payments, prevents any kind of fraud with bank cards, prevents the leakage of confidential data and funds
Credit card for contactless payments
Contactless payments actively use the same technology as credit cards with EMV chips and encryption. For credit cards that support contactless payments, when you swipe your card through a payment terminal, you send a one-time encrypted code to the payment terminal. By the time COVID-19 entered our lives in 2020, contactless payments were rapidly growing around the world. However, this trend only accelerated with the onset of the pandemic, and its popularity is growing at a very fast pace.
Numerous payment programs are available
Payment apps like PayPal, Google Pay, Apple Pay, and Facebook Pay allow you to conveniently and securely store multiple payment methods in one place. Payment apps give you access to key features like multi-factor authentication, notifications, and even online payments using facial and fingerprint recognition technologies. For example, Apple Pay requires a passcode on your device, but you can also set up Face ID or Touch ID. Apple Pay does not store or access your payment information. It also does not store any information about transactions that can be linked later.
Key payment methods to avoid
All payment methods have certain disadvantages (significant and non-significant), but debit cards are the riskiest method of payment. Debit cards offer the convenience of a card because you don’t have to carry cash or write a check, the money you use is tied to your bank account. Debit cards will only incur losses if you report a fraud on your account within two business days of discovering the fraud. If you do not report card fraud after more than 60 days, you risk losing the entire amount charged to your debit card/account. For example, funds from a bank account on linked accounts. This is according to the Federal Trade Commission (FTC). This means that actively using your debit card to make purchases online or in person can put your money at risk.
Ensuring the security of online payments
Google Pay, Mastercard, and many other modern electronic payment systems invest considerable funds in cashless payments. Therefore, paying for goods and services on the Internet is as reliable as paying with banknotes at the cash register. It’s even safer because there’s no risk of getting the wrong balance. Efforts by financial companies are futile when debit card holders allow criminals to gain personal access to their accounts. Like cash payments, secure online payments require caution and follow key rules. How can I pay securely with a bank card online? You must comply with information security. Let’s consider the key tips for ensuring security when making online payments.
Step 1. Get another card for online payments
If you often shop online, transfer the required amount to another card before shopping.
Step 2. Do not buy anything online if the store page does not have a secure connection
How to check? A lock will appear next to the site address. The address itself must begin with five characters “https://”. Depending on your computer or smartphone settings, you may see a lock or “https://”. Modern browsers individually identify untrusted websites and warn users when they request payment authorization. It’s a good idea to carefully check suspicious websites for scams.
Step 3. Limit your online payments to a certain amount
Set limits for online payments.
Step 4. Rejection of automatic recurring payments
Read the terms you agree to when placing an order. This may include repeated withdrawals from your card, even if this was not apparent at the time of purchase. Connect payment cards and transaction information via SMS and push notifications via smartphone apps.
Step 5. Avoid phishing sites
Criminals create clones of official websites to fraudulently obtain customer payment details using debit cards. Pay attention not only to the appearance of the page but also to the address of the page.
Step 6. Provide only the information that is required
Some stores may ask for the cardholder’s name. Additional data, such as date of birth or mother’s maiden name, are not required for payment. If the site requires it, you are dealing with scammers. Also, remember that the CVV2 code should only appear on online payment forms. Do not share this confidential information with anyone.
Step 7. Never enter your bank card password when making an online purchase
PIN codes from a bank card are used in ATMs. This is not necessary for online payments. If the site on which you want to make an online purchase supports 3D Secure protection technology, you will need one-time passwords that will be sent to you via SMS, Viber, or your bank’s mobile application.
Step 8. Back up the phone number associated with your bank account
The mobile number to which the bank card is linked must be removed from the social network.
What is the phenomenon of tokenization? What key benefits does it bring to modern society?
Most people associate tokenization only with cryptocurrencies. Like cryptocurrencies, tokenization is based on blockchain technology. However, the technology now has a wider use than digital currencies, as it adds some value to digital tokens and allows assets to be bought and sold online. Tokenization plays an increasingly important, key role in exchanges, tokenization can effectively protect confidential data and assets from any leakage. The concept of tokenization is a form of asset digitization. That is, taking the value of the property in an electronic version. The entire process is based on decentralized blockchain technology, which is known for its cryptocurrency power.
The phenomenon of tokenization consists of the creation of tokens and their distribution among specific people, companies, and projects. Nowadays, tokenization makes it possible to tokenize all types of assets while reducing the cost of their transfer. To understand the concept of tokens, it is worth explaining what blockchain is. It is a digital database that stores the history of transactions, payments, and accounting records. This is an accounting archive where you can check the status of the company. Blockchain platforms are transparent and public, so anyone can access them, but not everyone can change them. Also, the blockchain infrastructure is decentralized, so it is never in one place. The concept of a token is digital ownership of a certain asset. They are issued by a specific company and an investor who buys and owns them. Thus, tokens are somewhat equivalent to shares.
What are the key benefits of tokenization and why should it be actively used?
Tokenization is becoming more and more popular every year. Cryptocurrencies have undoubtedly helped to increase interest in this process, but this is far from the only reason why more and more people are interested in tokenization and its active use. Tokenization is especially useful for the many companies and institutions that need reliable protection of their confidential data. Tokenization allows data to be removed from the environment and replaced with tokens that contain unique information. In the case of a cyber-attack, instead of accessing the user’s data, the criminal gets access to the token itself, which turns out to be worthless to him.
Companies also want to use tokenization as part of securely sending and receiving payments. This increases the buyer’s confidence in their transactions and protects the company’s interests by ensuring completely secure transaction processes. Another key advantage is a significant reduction in the risk of any data leakage. This allows for better protection of confidential information from external disclosure. All these things that tokenization contains have a very positive effect on the trust of customers in the company and significantly increase the innovative power of the company.
What is blockchain? It is a database that stores the history of transactions, payments, or accounting records. They play the role of a kind of “accountant” and have access to what is happening in the company. In short, users enter data on the blockchain platform, which is an anonymous and public platform, instead of making “paper” calculations. Thanks to this, everything is visible, transparent, and even more secure. As the name suggests, blockchain is made up of blocks of data. Each data block contains a fixed number of records containing transactions. These blocks are connected.
This means that if someone wants to change the data (for example, transfer coins from a foreign account), they have to change the data in the block of data after the block they want to change, this is not possible. Another key security feature is that blockchain databases are decentralized databases. This means that there is no single place where the data servers are located, every user using the blockchain is a full-fledged trader. Tokens are usually issued by organizations that want to attract foreign investment. Investors buy tokens to add value to them. Tokens correspond to shares of trading companies and differ in that they are not shares, but goods. It should be noted that tokens should not be equated with cryptocurrencies, as tokens are property rights.