A sector as big as e-commerce, which grew at a rate of 9 per cent in Australia from 2014, warrants a very serious discussion regarding purchase security. Online shopping has become a favoured avenue because of convenience, variety and competitive pricing, yet the safety of payment practices is still being worked out.
Payment types vary from credit cards, debit cards, e-wallets, bank transfers, cash on delivery, and prepaid cards. However, with great access comes great vulnerability. In order to discuss the safer or more favourable options for payment, we first need to look at where payment mediums have gone wrong.
A Major ScandalRecently PayPal got caught with its hands in its customers’ pockets. More specifically, PayPal seems to have signed up customers for the PayPal credit service without express consent or actual knowledge, which came to light when it proceeded to charge its customers fees for missing payments.
In response to this scandal, The Consumer Financial Protection Bureau is ever so politely requesting that PayPal give back $15 million to affected customers and pay $10 million in fines.
This present scandal aside, long-term user complaints regarding PayPal have included frozen accounts for no apparent reason, random fees, non-existent customer service and issues with account fraud.
What now?So where is an online consumer to turn to if e-wallets like PayPal are out of play? One of the most common payment methods is still credit cards, which we all know come with their own risks and must be monitored very closely. Although mechanisms like Verified by Visa have been created to make the process safer, they are unfortunately not without their own oversights.
For example, the Verified by Visa system works through a PIN. However, if the user forgets their PIN, they simply have to press ‘reset PIN’ and they are redirected to a password reset window. The user is then asked very basic questions, like birthdate, to verify that they are the cardholder and can reset the PIN. As a scenario, let’s say your wallet has been stolen with your Visa card inside, what are the chances that your driver’s license with your birthdate on it is also in that wallet?
What’s more, Verified by Visa has encountered email phishing scams that ask customers to update information and, for security measures, to create a new password for the account. For a system that is in place to offer more security, the feeling remains uneasy that all is secure in these mega corporations..
There Are No Problems, Only SolutionsIdeally, what a safe system entails is one that is prepaid and allows the user to purchase goods and services online, such as paysafecard, so that if your wallet does get stolen or your information gets intercepted you cannot accrue extra charges. It should also require verification via a PIN or personalised security answer, and it must be registered to a user so the account can be frozen or blocked if the card is lost or stolen. Of course pre-paid credit cards are an option, but not all prepaid options are registered to a formal user or have loss protection policies in place like traditional credit cards.
If you are using a prepaid credit card, be sure to read the fine print, as some have hidden fees that extract from your balance (if the card is not in use, an activation fee, etc.). Also, keep in mind that you need to closely keep track of the balance and buy items that you don’t plan on returning as you cannot receive a refund onto a prepaid credit card.