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Secure payment methods may include credit cards, digital wallets, ACHs, and prepaid cards. Less secure methods include cash and debit transactions.
From ordering groceries to booking travel abroad, people can now make quick and seamless purchases with just a few clicks.
But as transactions move from physical card swipes to digital keystrokes, secure payment methods are increasingly important. And with the right tools and knowledge, secure online payments are possible.
In this article, learn about online payment security, including:
Secure online payments typically contain safeguards to help people protect their personal and financial information. When a shopper provides their payment information or other sensitive personal details to complete a purchase, a secure checkout and online payment method can help protect their data.
Elements of a secure online payment can include:
To create a secure and encrypted connection between a website and someone’s web browser, payment processing follows the Transport Layer Security (TLS) and Secure Sockets Layer (SSL) protocols.
They work as two layers helping create a safe environment for transmitting sensitive information via the "TLS/SSL handshake." This process can establish a secure connection and allow for encrypted data transmission.
Websites using these protocols can usually be identified by the "https://" in the URL and often display a padlock symbol in the browser's address bar.
By prioritizing secure online payment methods, people may be able to shop with peace of mind. Examples of safe ways to pay online include:
From shopping in person to making online purchases, credit cards are generally considered a secure payment method. Here are a few potential security benefits when shopping with a credit card:
A virtual credit card can be a temporary digital payment tool. Typically, they contain a unique card number, expiration date, and security code, separate from a cardholder’s physical credit card.
Designed for one-time or limited use, people can typically generate a new card for single payments or transactions, which can make this online payment option convenient for safe online shopping.
Since these card numbers are distinct from physical credit card details, they may help reduce the risk of exposing card information to potential hackers or fraudsters.
A digital wallet can be a secure and convenient payment method that can store payment information, such as credit card details, bank account information, and digital currencies. Some people may use a digital wallet instead of a traditional physical wallet, allowing them to make online purchases, in-store payments, P2P payments, and bill payments on the go with an electronic device.
For example, the PayPal digital wallet enables consumers to spend, send, and manage transactions almost anywhere they are. Plus, they can sometimes gain Purchase Protection, depending on the transaction type.
So, what makes digital wallets safe? Digital wallets typically utilize advanced encryption and authentication techniques to enhance security. Instead of sharing the actual payment details, digital wallets may use a token or a unique identifier to complete the transaction.
Another potential way to make secure transactions is via Automated Clearing House (ACH) payments, which can allow people to transfer money from one bank account to another.
They operate through a secure network and usually employ encryption protocols that help protect sensitive information. ACH payments typically require authorization from the account holder, adding an extra layer of security.
A prepaid card can allow individuals to load funds onto the card in advance. They’re not linked to a bank account or credit line, so the potential for financial loss may be limited to the available balance on the card.
By using a prepaid card for online transactions, individuals can keep their primary bank account information separate from digital purchases.
eChecks are similar to ACH payments, but are generally more commonly used for one-time payments. They're impossible to steal, and they use encryption protocols similar to ACH payments to secure personal information.
Gift card security stems from the fact that they are pre-funded and not directly linked to a bank account or personal financial information. This means that if a gift card is compromised, the loss is limited to the card's loaded value, protecting broader financial assets from exposure.
Legitimate gift cards from reputable retailers also often include security features like PINs that cardholders must scratch off or use a digital code to reveal. These PINs, along with unique card numbers, help prevent unauthorized use.
There are some payment methods, both online and in-person, that carry more inherent risks. This can be due to several factors, such as:
Below are some examples of payment methods that are less secure.
While generally a trusted payment method, cash can carry some inherent risks. It’s not traceable, can be easily stolen, and also has little or no purchase protection.
If a cybercriminal gains access to funds, the money immediately leaves the account, making debit a potentially risky payment method. There’s also the risk of overdrawn accounts and higher fees.
Paper checks contain sensitive banking information (account number, routing number, signature). If a check is stolen, this information can be used for identity theft or to create fraudulent checks.
There's also the risk of a check "bouncing," where an individual deposits a fraudulent check and then becomes responsible for the loss.
Once someone sends a wire transfer, it's extremely difficult, if not impossible, to reverse or recover the funds, even if it's part of a scam. There's often no consumer protection or recourse once the recipient picks up the money. This makes them a favored payment method for fraudsters.
While crypto can be safe, because of its decentralization, the transactions are generally irreversible. Once sent, funds are very difficult to recover, making them attractive to scammers. Regulation and consumer protection are still evolving in this space.1
Wondering how to check if a website is safe? When shopping online, consider potential signs that may indicate online transaction security, such as:
While the above qualities can help indicate proper security measures, scammers may be able to fake some of these aspects to lure shoppers into a false sense of security. Be sure to assess a website thoroughly and seek out official contact information for the company if a website seems suspicious.
It’s crucial to use trustworthy and secure payment methods. Always evaluate the payment mode before entering any personal information, and avoid entering information onto non-secured sites or apps.
PayPal’s secure payment methods, 24/7 fraud monitoring, encryption, and purchase protection for eligible transactions offer peace of mind when sending money. And our latest authentication tools make logging in to our online payment platform easy and secure.
Learn more about security and protection with PayPal.
It's your do-it-all digital wallet. Load up on cash back offers before you shop. Track your packages. And manage it all on the go.