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Have online payments become safer than offline?

With such sophisticated and ever-evolving systems protecting online payments, some may argue online is a safer option.

google and paypal integrations
Image: CoinDesk

There is so much panic around using online payment systems and providing machines with our personal banking information, especially in a post-Cambridge Analytica scandal world when we know just how much information can be harnessed from our data. As a string of information breaches scandalized consumers in 2019, trepidation around online payments is at an all-time high. 

Yet, interesting articles in Wired and other outlets highlight that this fear might just be because we do not know the proper difference between online and offline payments. 

What Do We Mean By Offline Payments?

They could be anything, including using your debit or credit card, such as:

  • Using cards in-store
  • Writing or cashing a cheque
  • Using cash to pay
  • Paying for goods and services over the phone
  • Providing banking details in emails

So, What Do We Pay For Online?

With the rise of ecommerce, we can buy all goods online. We can also pay for experiences, services, and our financial products, too. With the rise of fintech and online loans, consumers pay their short term loans payments, their car finance and their deposits for mortgages all online. Why? Because it’s safer and easier. 

Paying offline has so much risk involved, too. For example, even if you take security precautions with your card in-store, outdated store software or technology can still put you at risk. Just because the payment terminal has been updated to include contactless integration does not mean that the whole system has had the security upgrade it needs. The payment, which consists of a sum and your personal card details, will need to be coordinated with point of sale machines, payment processors and other databases, making your money vulnerable. This is because the databases can be hacked, or the payment can be intercepted by hackers. Indeed, hackers are a threat for offsite payments, too. In fact, accessing these databases is normally how fraud is committed. 

Is It Safer To Make Loan Payments Online Or Offline? 

Loan payments and credit that is paid using an automatic system means that consumers do not have to worry about their repayment dates, which could protect their credit score by reducing the risk of missed or late payments. It will still be up to the borrower to ensure that the required money is available in the account before the due date to prevent any harm being done to their credit profile. However, these systems are much better encrypted and protected from malware and manual attacks, which means you are less likely to be hacked than if you called up every month to make your payment. 

It’s imperative that online-only businesses invest in safe and secure online payments, because the reputation of their business is at stake. This is typically why small, online retailers just starting out will choose to use a third party payment method, such as PayPal, to protect consumers’ payments and their reputation as a business, because it is too expensive to set up a bespoke system right from the offset. 

So many automatic or online payment systems have two-factor authentications or another layer of protection. With technology rapidly developing, this now features biometric access like fingerprinting authentication, as well as added password protection and regular algorithm changes to protect your data. 

There are so many other, very rudimentary risks associated with offline payments. Your wallet gets stolen, your cheque gets lost in the post, your card details get intercepted from an invoice receipt. There are risks whenever money is transferred or moved, but with such sophisticated and ever-evolving systems protecting online payments, some may argue online is a safer option.

Have any thoughts on this? Let us know down below in the comments or carry the discussion over to our Twitter or Facebook.

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Chris has been blogging since the early days of the internet. He primarily focuses on topics related to tech, business, marketing, and pretty much anything else that revolves around tech. When he's not writing, you can find him noodling around on a guitar or cooking up a mean storm for friends and family.

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