Avoiding Credit Card Fraud When Shopping Online

At least half of all American consumers consistently shop online. Obviously, there are many benefits to this but there are also many concerns. Shopping online is convenient, but it also brings apprehension because of how vulnerable consumer information is on the internet.

Identity theft is a relatively new crime that concerns a lot of people; and rightfully so, as it is one of the fastest-growing crimes in the world. When you think about it, this makes perfect sense because it doesn't require large teams of criminals or any special equipment. That's why it is very important for companies who conduct business online to ensure that their customer information is safe and secure. Thankfully there are many different ways that this can be done.

  • Merchant verification programs
  • Paypal
  • Electronic Payment Systems
  • Virtual Credit Cards

Merchant Programs

One of the easiest ways to shop online securely is by only shopping with verified merchants. Basically, when you get to the final authorization page of your purchase, you will see a symbol that says the transaction is "Verified by Visa" or "Verified by MasterCard." There aren't too many sites out there that offer this (there are many, but nothing near what you might expect in the grand world of e-commerce), so your scope is limited as to where you can shop. Still, if you like "official" verification, this is the way to go.

PayPal

One of the most secure ways to conduct online transactions is through Paypal, an online credit card alternative that is owned by eBay. It is a network of account holders who can transfer money freely to each other using just a user's e-mail address as a means of identifying account holders.

Every time money is transferred, Paypal takes a very small percentage as a transaction fee. Obviously, this is much safer than transferring money between actual bank accounts over the internet. You can assign bank card numbers to your account, which you then use to withdraw and deposit money just like a regular credit card.

One of the greatest benefits of Paypal is that it not only acts as a way to transfer money between account holders, but it can actually be used to make payments. If you have money in your account and you want to buy a product or service from an online company, you can use your Paypal account to pay for it (as long as they have an account too).

Electronic Payment Systems

These are systems that operate just like Paypal does. You can setup an electronic payment system that allows you to transfer money from your credit card or checking account (via debit card), and then use it when you want to buy something. This option will be available to consumers at checkout, just like Paypal and credit card options. Once you complete the transaction, you receive an e-mail that informs you of the transaction so that you can confirm it. Again, this is done to avoid the transmission of your specific credit card and personal information.

Virtual Credit Cards

Although not the most popular option in general consensus, virtual credit cards are quite suitable for consumers who are more than a little apprehensive about losing control of their online credit information. These cards act just like credit cards because, in fact, are issued by reliable credit card companies like CiriBank and Discover. Basically, these "cards" are alternate account numbers that are linked to your traditional, physical credit card which can be used whenever you buy something online. It's kind of like using a proxy.

There are many companies who are also picking up on this trend. You can even create a "one-time-use" virtual credit card that you can link to your account a single time for one purchase. The tracking for that virtual account is then disengaged after you use it. Sure, it’s not as convenient as other methods, but peace of mind is usually worth it.

Final Word

As long as consumers continue to shop online, there will always be concern about online credit security. Of course, as long as there is concern, companies will always develop new and better ways to conduct business online in order ensure consumer satisfaction.