What Exactly is Protecting Your Online Transactions?

So, like millions of others, you’ve taken to making purchases and paying your bills online. The speed of delivery, the ease, and the convenience are truly remarkable considering where we were just a couple short decades ago. But, have you ever considered what exactly makes up the technology that protects your personal information--and your money--from theft while operating on the Internet? We’ll take a short look at the technology that is constantly working to protect your Internet transactions.

The main technology used by online retailers (or any other business that accepts payment through the web) is encryption. Encryption is the process of converting the manner in which data can be interpreted. All this means is that if you have the simple message “Hello”, encryption will change it to something that makes it completely unreadable by any system that doesn’t have the encryption key. This provides a data protection for any data sent through and encrypted channel.

There has to be more than that hasn’t there? I mean, over a billion dollars a day is spent on the Internet on retail sales, and the only thing protecting all that data is one thing? The answer to that is a resounding no. Encryption is a must-have tool, but overall, the strategies that keep you going online--the ones that will protect your assets--come from you. Here are four things you can do to ensure that e-commerce and e-payment don’t become e-mergencies.

Change Your Passwords
This one is simple, but effective. Every account you have has some type of password. Most accounts today have two-factor authentication with some sort of biometric or authorization option that provides an additional level of security. The first level of security, however, is always the password. If you change your password frequently, there will be a major reduction in the chances that your account will be compromised.

The National Institute of Standards and Technology (NIST) has changed their recommendations about how to effectively utilize passwords. At one time, it was en vogue to utilize a string of random numbers, uppercase and lowercase letters, and symbols, but too often the unique string of characters were too difficult for the user to remember, repeatedly locking people out of their accounts. Today, they suggest using phrases of random words that you can remember, or to use a password manager.

Shop On Secure Sites
When shopping online, it is important that you are shopping behind technology designed to secure your financial information. This can be easily ascertained just by looking at the protocol bar in the browser. If the URL of the site you are shopping on doesn’t have the protocol “https”, the website you are on does not have a security certificate, and you are risking your information being exposed by entering personal or financial information into fields on that page.

Utilize Safe Payment Methods
If a company has an e-commerce store on their website, there is a pretty decent chance that they accept several secure methods of payment. One extremely popular option is to use PayPal. PayPal is a third-party payment site that securely holds people’s financial information for instances where they want to purchase something online. PayPal will require you to login (it will normally make you go offsite to do so) and select the form of payment you want to use. This holds PayPal liable if something were to go wrong with the transaction. Other options are out there that do the same thing, and using them is a good strategy to keep your financial information out of retailers’ hands.

Beyond that, experts suggest utilizing credit cards rather than debit cards to complete online transactions. This is because credit cards typically come with more consumer protections than bank-issued debit cards do. You wouldn’t want to get into a situation where your card is compromised and your savings account was drained of cash. Most credit cards have static limits and protections against unlawful use.

Monitor Your Money and Credit
To ensure that everything is on the up-and-up, you have to know where you stand. In order to reliably know that your identity (and thus your financial information) hasn’t been used monitoring your financial health is important. There are several ways to do this. First you should monitor your bank and credit accounts regularly. Many banking institutions give you the option to get push notifications when your accounts are used. These come in handy if something were to happen and your financial data becomes compromised.

You should also frequently check your credit report. Your credit report will definitely show any accounts opened in your name in the recent months. This could be the difference between having unauthorized parties charge up huge sums of money, and nipping any unauthorized spending in the bud by freezing your credit until the situation can be remedied.

Shopping online is a way of life for most of us, but with all the threats out there looking to take advantage of consumers online, it takes a lot more diligence to manage your money than ever before. Have you had problems with identity theft? Share your experiences in the comments below.