What are some safe ways to pay online?

There are several online payment methods that offer added security, including digital wallets, Paze®, virtual cards, credit cards and Automated Clearing House (ACH) transfers, each with its own approach to protecting your information online.

Online payments are widely used for shopping and paying bills, but not all methods offer the same level of security. That’s why it’s important to understand how different payment methods protect your information online.

What you’ll learn:

• Digital wallets, Paze, virtual cards, credit cards and ACH transfers are common ways to shop or pay bills online.

• Credit cards generally have fraud detection systems and unauthorized charge liability coverage, so you’re typically better protected from unauthorized card transactions when using them. You can add a layer of security by using a virtual card, a digital wallet or Paze.

• Debit cards may not be as safe for online payments as credit cards because they’re directly linked to your bank account and don’t always offer the same level of fraud liability protection.

Here are five popular online payment options that offer convenience along with security features that can help you shop online with more confidence.

A digital wallet is an electronic version of your physical wallet that allows you to pay for things online without manually entering a physical card number on a merchant’s website. You can use these on your desktop computer, laptop or mobile device, and they often can be used to make in-person payments as well through tap to pay.

Digital wallets help protect your financial details using a process called tokenization. This replaces your physical card number with a random number, which may help protect your physical card number from being compromised.

Digital wallets also may require authentication before you make a purchase. For instance, the app might ask for a PIN or require biometric authentication, such as scanning your fingerprint or face, before authorizing a transaction. If your smartphone somehow ends up in the wrong hands, these security measures can help keep others from using your digital wallet.

Popular digital wallets you may have heard of include:

• Apple Pay®
• Google Pay™
• PayPal®
• Samsung Pay®

Paze is a way to check out online at participating merchants that’s offered by major financial institutions, including Capital One. Similar to other digital wallets, Paze allows you to choose your desired debit or credit card at checkout without having to enter your card number on the website. And for added security, Paze doesn’t share your actual card number with merchants. But unlike other digital wallets, Paze doesn’t require downloading a separate app or creating a new username and password.

To check out with Paze at a participating merchant, select the Paze checkout button or enter the email address or phone number linked to your Capital One account to launch Paze. Paze shows all your eligible cards in one place. Simply choose your Capital One card to complete your purchase.

A virtual card is a unique, randomly generated card number that’s linked to your credit card account. Virtual card numbers help make online purchases safer because the merchant doesn’t receive your physical card number. This added layer of security is just one of many benefits of using virtual cards for online shopping. They also make the online checkout process easier since you don’t need to have your physical card on hand.

If you’re a Capital One cardholder, you can access a general-use virtual card through the Capital One Mobile app or website, or create merchant-specific virtual cards. Merchant-specific virtual cards can only be used at the designated merchant. This offers an additional layer of security because if a merchant’s website is compromised, a fraudster may not be able to use the virtual card number anywhere else. You can also create virtual cards through Google Pay when shopping online on Google Chrome or in Android apps, and check out with autofill for added convenience.

Credit cards generally have built-in security features that help make them a safer online payment method. For instance, secure websites use encryption to scramble your card information. This makes it harder for anyone to steal your credit card number after you type it in. And if someone does access your account, it may trigger your card issuer’s fraud detection system.

Even if an unauthorized purchase goes through, you may have zero-liability protections against fraud. All the major card networks—Visa®, Mastercard®, Discover® and American Express®—offer $0 liability for unauthorized credit card payments. That means you’re usually not held responsible if someone uses your card without your authorization, subject to the applicable zero-liability policy’s terms.

Most card issuers also offer this benefit, including Capital One. The key here is that you have to monitor your credit card account and promptly report fraud to your card issuer. 

These built-in consumer protections are one reason credit cards are often safer than debit cards for online transactions. 

The Automated Clearing House is a secure network that moves money between banks in the U.S.

ACH transfers fall into two categories: direct deposits and direct debits. For instance, you might receive paychecks by direct deposit from your employer. And you might pay a bill online with a direct debit from your bank account. In both cases, the money moves through the ACH network and clears within a few business days. Your banking details are transferred securely through a network, making it harder for anyone to steal your information.

Whether you enter the number manually or access it through a digital wallet or other payment method, a debit card may not be as safe an option as a credit card since it’s directly linked to your bank account.

In addition, there’s a chance a debit card might not offer the same fraud liability protections as a credit card. Capital One offers $0 liability for unauthorized transactions with debit cards, so you won’t be responsible for unauthorized purchases if your Capital One debit card is lost or stolen. But other financial institutions might not do this. For instance, if your debit card with another financial institution is used fraudulently, you could be responsible for up to $500 of unauthorized charges if you don’t report the issue promptly—potentially even more if you report the fraudulent charges more than 60 days after the statement is issued. It may be a good idea to check with your bank to see if they offer $0 liability for unauthorized debit card transactions.

Still have some questions about making safer payments online? Take a look at these answers to frequently asked questions.

When shopping or paying bills online, digital wallets, Paze, virtual cards, credit cards and ACH transfers all come with security features that can help protect your money and identity. Different online payment methods come with different security features, so consider what works best for you before deciding which method to use.

Credit cards are at the center of many payment methods and have several layers of protection. For easy access to digital wallets, Paze and virtual cards from Capital One, download the Capital One Mobile app today.