Comparison of the security of online payment methods

SPRINGFIELD, Mo. – Wicked reports compiled data to compare the security of popular e-commerce payment methods and the associated risks.

In a world where convenience seems to be valued more than ever, it’s safe to say that online shopping has become the norm. After all, why spend time traveling somewhere to buy products when they can be delivered? Americans spent nearly $250 billion on e-commerce in the first quarter of 2022, according to preliminary data from the US Department of Commerce. This is an increase of 6.6% compared to the same period the previous year.

Online sales have surged during the COVID-19 pandemic due to lockdowns and other factors, according to the United States Census Bureauand this trend will continue as more businesses improve their online shopping offerings.

Although online shopping presents itself as a safe and contactless option, it does come with risks. In 2021, Americans lost at least $392 million to online shopping fraud, according to the latest data from the Federal Trade Commission. This was the second most common type of fraud after scams by imposters. Staying diligent, especially when it comes to billing and payment methods, is crucial.

When you checkout an online store, there are usually multiple payment options. It is important to educate yourself on these to determine which is the safest. Wicked reports reviewed consumer protection laws and other security measures to determine how secure popular e-commerce payment methods are and compare risks.

Debit cards

Consumers using a debit card for online payment should familiarize themselves with the Electronic Funds Transfer Act, which protects consumers against unauthorized/incorrect electronic funds transfers, incorrect receipts and/or any accounting errors in such transactions. If you report your debit card lost or stolen within two days, consumer liability is limited to $50. This liability increases to $500 if reported within 60 days.

There may also be an investigation that lasts from 10 to 45 days, depending on the Consumer Financial Protection Bureau. The Federal Reserve’s “Regulation E” limits a consumer’s liability for fraudulent or unauthorized debit card purchases to $50, as long as the customer reports the theft to their bank within two days.

Credit card

While EFTA protects debit card transactions, credit cards fall under the Fair Credit Billing Act. Also known as Truth in Lending Act, the FCBA limits liability for unauthorized credit card transactions to $50. It is intended to protect consumers from bad credit industry practices.

Unlike Regulation E, no liability can be imposed where a physical card is not involved, such as purchases made online or over the phone. With a fraudulent debit card transaction, the consumer is immediately affected and must fight to get the charge waived, while fraudulent credit card transactions are safer because the card issuer is liable, not the consumer.


PayPal is one of the most popular online payment systems and it follows specific measures to ensure user safety. Security keys are still optional but recommended, as it is a two-step authentication with a different PIN code for each connection. In addition, confirmation emails are always sent with each transaction.

Transactions are sent with end-to-end encryption, which means that sellers cannot see buyers’ financial information. PayPal also offers full refunds if products are different from their descriptions or never arrive. Additionally, users are not responsible for unauthorized purchases reported within 60 days.

Mobile wallets

With the rise of financial technology, also known as “fintech”, people can use their phones to make payments. Digital wallets and mobile payments– like Apple Pay, Google Pay and Samsung Pay – act as a fairly safe and convenient payment method. The mobile wallet user simply authorizes the use of their debit or credit card on their smartphone when shopping online or at a point of sale.

Digital wallets offer two-factor authentication, encryption and one-time use PINs to ensure payment security. However, users should make sure to implement screen locks with strong passwords or biometric authentication on their phone. They must also deactivate their device as soon as it is lost or stolen. These preventive measures will reduce the risk of hackers obtaining personal information.

Buy now, pay later

Since the start of the pandemic, buy now, pay later programs, such as AfterPay, Affirm and Klarna, have grown in popularity. Most of them require buyers to deposit 25% of the total payment and pay the rest in three installments over a six-week period. Best of all, there are no fees or interest charges.

However, BNPL programs are so new that they are not subject to the same federal regulations or consumer protections as other payment methods like credit or debit cards. Typically, these lenders require consumers to contact the retailer for a return or refund, but shoppers may still have to repay their loan until the lender is notified by the merchant that the transaction has been canceled or refunded.

This story originally appeared on Wicked Reports and was produced and distributed in partnership with Stacker Studio.