Safest ways to pay in 2021 and beyond

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Cybercrime is definitely on the rise, and many of the most troubling criminal acts center around in-person and online payment methods as well as general identity theft. According to the Insurance Information Institute (III), the most common identity theft complaints in 2020 (32 percent) were related to scams involving government benefits, including federal stimulus payments. Coming in a close second was new credit card account fraud, making up 30 percent of all identity theft complaints last year.

In total, the III reports that there were 4.8 million identity theft and fraud reports received by the Federal Trade Commission (FTC) in 2020, which is up a staggering 45 percent from 2019.

With all this in mind, you may be wondering about the safest ways to pay for purchases when you’re shopping in a store or browsing the web. The good news is, there are plenty of in-person and online payment methods that have the technology and features to keep your personal information safe.

Secure online payment methods

If you’re hoping to make your transactions as secure as possible when you shop online, consider the following online payment methods.

Credit cards

By and large, credit cards are easily the most secure and safe payment method to use when you shop online. Credit cards use online security features like encryption and fraud monitoring to keep your accounts and personal information safe. Most issuers also offer zero fraud liability that ensures you won’t be on the hook for a cent in fraudulent transactions charged to your credit card.

Beyond the zero fraud liability coverage credit cards offer, you can only be legally liable for up to $50 in fraudulent charges on a credit card due to language in the Fair Credit Billing Act (FCBA).

ACH payments

Automated Clearing House (ACH) payments let you transfer funds directly from your checking account to another bank account. This payment network adheres to plenty of security features that keep your banking information safe, such as encryption and the implementation of access controls.

Voice payments

According to the 2020 How We Will Pay Study by PYMNTS and Visa, 23 million consumers who own a voice device, like an Amazon Echo or Google Nest, use their device to make purchases while going about their daily routines. If you want your voice payments to be more secure, you should set up a credit card with zero fraud liability as your preferred payment method.

Secure in-person payment methods

Technology has also made in-person payments more secure than ever, and that’s especially true for those who make payments in person using a mobile device. The following in-person payment methods boast increased security features that help protect your personal information.

Credit cards with EMV chip technology

Where you once had to swipe your credit card to make an in-person payment, most credit cards today feature EMV chip technology instead of a magnetic strip. With EMV technology, the payment terminal reads your card for the unique, encrypted information transmitted by the chip on your card. Since the single-use encrypted information is different for each transaction, this technology helps to eliminate counterfeit fraud.

EMV technology has expanded rapidly over the last decade, both in the U.S. and around the world. According to standards body EMVCo, nearly 9 in 10 (86 percent) of card-present transactions worldwide were made using EMV-chip-enabled payment cards in 2020.

Credit cards with contactless payment

Contactless payments use the same technology as EMV chip and pin credit cards. With a credit card that allows contactless payments, you’ll hold your card above the payment terminal and the terminal will receive an encrypted, one-time use code for the transaction.

Before the coronavirus pandemic, contactless payments were already on the rise and this trend has only been exacerbated by the pandemic. According to the 2020 How We Will Pay Study, 60 percent of consumers—148 million people—would prefer to use contactless payments at the point of sale if given the choice.

Payment apps

Payment apps like PayPal, Google Pay, Apple Pay and Facebook Pay let you store multiple payment methods in one place for convenience and security. With a payment app, you can benefit from features like multi-factor authentication, notifications and even facial or fingerprint recognition.

With Apple Pay, for example, you have to have a passcode on your device, but you can also set up Face ID or Touch ID. Apple Pay also doesn’t actually store or have access to your payment information, and they don’t retain any transaction information that can be tied back to you later on.

Payment methods to avoid

While every type of payment method has some disadvantages, debit cards are probably the riskiest form of payment. Debit cards do offer the convenience of credit since you don’t have to carry cash around or write a check, but the funds you use are actually tied to your bank account.

Unlike credit cards that typically come with zero fraud liability and limit you to $50 in losses per the FCBA, debit cards only limit you to $50 in losses if you report the fraud to your account within two business days after you noticed it.

  • If you report fraud more than two business days but less than 60 calendar days after your statement is sent to you, you could be on the hook for up to $500 in fraudulent charges.
  • If you don’t report card fraud for 60 or more days after your statement is sent to you, you could lose “all the money taken from your ATM/debit card account, and possibly more; for example, money in accounts linked to your debit account,” according to the Federal Trade Commission (FTC).
Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson writes expert content on personal finance, credit cards, loyalty and insurance topics. In addition to writing for Bankrate and CreditCards.com, Johnson does ongoing work for clients that include CNN, Forbes Advisor, LendingTree, Time Magazine and more.
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