Skill Level Intermediate
- [Instructor] When it comes time to pay for something online, we often reach for our credit card and enter the card details into a web form. And for most people in most situations, this is a very common method of exchanging money for services or goods on the Web. If you're interacting with a retailer you trust or use frequently, you may not have any problem with them storing your credit card information to make checkouts and purchases even easier. But there are two issues to consider with using and storing credit card information for purchasing online. These are the potential for data leaks and the possibility that a vendor may be less than trustworthy. As we've seen many times in the past few years, data breaches at companies large and small can reveal personal information about customers. Often it's account information, like an email address and password that are leaked. But sometimes, if it's not properly protected, payment information can be leaked as well. Credit card information like the credit card number, expiration date, and security code, once exposed, can be used to make unauthorized purchases anywhere in the world. The other problem, an untrustworthy vendor, is less common when you're dealing with huge and well-known websites. But for other smaller vendors or vendors which are relatively unknown, there can be more of a risk that they don't properly secure data and even the possibility that they may be set up as a way to collect payment information for some other purpose. This isn't to say that just because a website you buy something from isn't Amazon or Netflix, that they're automatically untrustworthy when it comes to your payment information, far from it in fact. Many small sites use huge payment providers that treat data securely and make the purchase process easier for you and for the vendor. But if you're using a site that doesn't take advantage of these services, the risk is greater. Let's take a look at some different options to help secure your payments online. Probably the easiest method of helping to make sure your payment information isn't compromised in a data leak is to choose not to store your payment information with a website. This is a little bit less convenient because you'll need to enter your payment information every time you buy something. But if the site you're using is on the up-and-up, they'll honor your request to not store the payment information, and there won't be any payment information for them to leak if they suffer a breach. Another option is to use a dedicated payment card for all your online purchases and a different card for your in-person or real-life transactions. If that dedicated card is compromised, the damage will be limited to that card and your other cards won't be affected. In many places, you can purchase gift credit cards. These start out with a balance of whatever you paid to purchase them, and they work just like any other major brand credit card. In most cases, you can reload money onto them to raise their balance for large purchases or to keep enough money on the card to pay for recurring payments. They have the added benefit that you can use them in real life, like a regular card. And using gift cards with numbers that are different from your real cards, you can avoid some of the tracking that retail stores and online stores do by linking purchases to the same credit card over time. If you're concerned about tracking, you can just purchase new gift cards, getting new numbers each time. And you can use different cards every so often or use different cards at different vendors. Though, if you provide some other kind of information along with a purchase, like keying in your phone number for a store's loyalty program, your purchases can still be connected to each other and tracked that way. Gift cards are also very useful for people who don't have a credit card or don't want to use their credit cards for online purchases. Many banks offer the ability to generate one-time credit cards. This process generates a new card number, different from your actual card numbers, which you're able to use online. Some of these programs allow you to set a maximum limit for the card and even an expiration period after which the number won't be valid. Using a one-time credit card is a good choice if you need to purchase something from a vendor you don't trust very much. If the information is compromised, the damage is limited both in monetary value and to the time period in which the generated card is valid. Usually these one-time cards just charge through to your real card, and that connection is managed by your bank. So behind the scenes, you're paying with your regular card, but that card's information is never sent to the vendor. Some companies offer a service that works in a similar way, which connects with your card provider to generate a stand-in number and one-time password for your credit or debit card. We see this technology in features like Apple Pay, Samsung Pay, and Google Payments. When you make a transaction using these services, the vendor's payment system gets this one-time generated information and communicates with your card provider, which charges your real card without revealing your actual credit card information to the vendor. To enable this feature, you need to go through an enrollment procedure, after which you can use your payment method on your device, at wireless terminals, or on the Web, to make payments while protecting your information. The payment information used in these transactions isn't valid after the transaction takes place, which helps to limit the risk of fraud and your risk from a payment-related data breach. As I mentioned before, not everyone has a credit card, and there are services that can help to secure transactions made without one. Services like PayPal and Venmo connect to a checking account and give you the ability to pay with an app or with information from those services instead of using an e-check or wire transfer. Other similar apps, like the Cash App from Square and Apple Pay Cash, work by creating a credit card behind the scenes for you and using that to facilitate payments between people or between a person and a business. Bitcoin and other cryptocurrencies have become popular in recent years. These work in a somewhat different way than credit cards and checking accounts. To use cryptocurrencies, a user sets up a wallet and a payment address. A user then buys, receives, or mines coins, blocks of information that are part of a system that tracks transactions. And then to conduct a transaction, the user transfers whole or fractional amounts of coins to the payment address provided by a vendor. The coins involved in this payment can be used for other payments later or can be sold for currency. If you'd like to learn more about bitcoin, be sure to take a look at our bitcoin courses here on LinkedIn Learning. Payment information isn't the only personal information you should safeguard online. But there are many options available to you for payments, and it's worth taking the time to consider which you want to use for individual transactions you need to make.