Thanks to services like Apple Pay and the now standard EMV chip cards, you likely have more payment options than space in your wallet (or in your smartphone). But having ample choices doesn’t necessarily translate into better security.
When it comes to secure payment methods, it’s worth knowing the pros and cons of each, so you can make an informed decision. With that in mind, here’s a look at the top options and what you need to know for payment security.
Mobile payment apps are designed to free you from cash and credit cards by allowing you to digitally transfer funds to family, friends, or merchants. You will generally link your bank account or credit card information to the app, which is where the funds will be pulled from. These apps are widely-used, with 60 percent of U.S. adults using them. That number jumps to 80 percent for Millennials.
Pros: Vendors like PayPal, Venmo, Zelle, Cash App, and others are highly sensitive to payment security concerns, so they maintain robust controls to keep information safe. If you also employ mobile device security, these digital wallets can be safer than credit cards tucked into a traditional wallet or billfold.
Cons: Mobile payment technology that collects all a user’s financial data in one place seems too tempting for hackers to pass up. Especially now that there’s such widespread adoption, we’ve seen a lot of scams arise.
EMV-Enabled Credit Cards
Also called “chip and PIN” or “chip and signature” cards, these smart credit cards are designed to be more secure than traditional cards that require only a user’s signature.
Pros: These cards have an integrated chip that creates a new authentication code for every transaction, so it adds an additional layer of payment security. Also, the cards can’t be “cloned,” which is a hacker’s way of stealing information from a traditional card’s magnetic strip and making a new card.
Cons: Even though many retailers have readers that can accept these cards, not every restaurant, shop, and venue have the technology to read them. You can still use the cards by giving your signature, but you’ll miss out on the extra security the chips provide.
With online banking, many people write only a few checks per year, and that may be a good thing. Banks are attempting to put more payment security controls in place, but check scams are still far too common.
Pros: For one-time payments (magazine subscriptions, charity donations, or monetary wedding gifts), checks can be a convenient payment method.
Cons: Checks not only feature your name and address, but also your bank account and bank routing numbers. Worse, they give identity thieves an example of your signature. Because of this, you should send checks only to people or companies you trust, and regularly review your bank transactions to look for fraudulent check amounts.
The use of good old currency is starting to seem like a thing of the past. Even small transactions, like buying a newspaper or a cup of coffee, can be done with a swipe of a card or smartphone. But don’t ditch the paper money quite yet.
Pros: As easy as it is to swipe a card everywhere you go, security concerns will go along with you. That’s why it makes sense to pay with cash whenever possible, especially for smaller transactions. Cash carries zero risk of identity theft.
Cons: No one feels particularly safe carrying a large amount of cash, and if that money is lost or stolen, it’s gone — unlike credit or bank cards, which can be replaced.
In general, every form of payment has its risks, and it can be tricky to keep payment security in mind when you’re running errands or trying to speed through online ordering. But, to increase protection and minimize the chances of identity theft, it pays to focus on security during any transaction.
IdentityForce monitors all your banking and credit card transactions, and instantly alerts you to any suspicious activity related to your account. This allows you to put a stop to any nefarious activity before it causes real financial damage. Sign up today for an Identity Theft Protection Free Trial.