Online transactions via credit cards are secure and convenient if used wisely. However, like any other monetary instrument credit cards run the risk of fraudulent usage. The lack of knowledge on how to conduct online transactions via credit cards has resulted in people avoiding it in general.
Below we have challenged some common myths around credit card’s online usage and listed ways to protect you from fraud.
Top Misconceptions around Online Credit Card Usage
Cyber-Attacks – Given the recent rise in cyber-attacks people are reluctant to conduct credit card transaction online.
Though it is true that cyber-attacks are on the rise, the government, RBI and banks continuously ask their customers to not open any suspicious emails, conduct purchases on dubious websites and report any suspicious activity to the bank. Government agencies, RBI and banks are constantly on the lookout for any such threats.
No recovery of stolen funds – People believe that there is no hope of recovery of stolen funds. This fortunately is not true in case of credit cards. If a fraudulent transaction took place because of the bank’s negligence then you will receive full refund. However, if the fault occurred because of a third party then you won’t bear any liability if you report it within 3.
In case the loss is because of your negligence then you might have to bear full liability till you report it. However, many credit cards offer lost card liability cover saving you from bearing the full loss.
In the event the fault lies with the third party and you don’t register the same with the bank within 4-7 days then you will be liable to bear the following amount:
Credit Limit on Card
Above Rs. 5 lakh
Beyond 7 days your liability will be decided as per the bank’s internal policies.
Note: Most banks provide lost card liability cover which protects user’s funds for up to 7 days or more before the loss is reported.
It is easy to make fraudulent transaction on credit card – In India a successful credit card transaction requires One Time Password (OTP) verification. This number is sent to the registered mobile number only. Also, customers can disable their cards for international transactions to protect themselves against foreign transactions that do not require OTP.
Third Party Payment Services/ E-wallets are unsafe – You run the risk of losing all your card information in the event your mobile is stolen and the thief is able to access your apps. However, the major benefit of using third party payment services such as PayPal or PayZapp is that you share your credit card information with only one merchant. This will protect you against data breaches as you expose your information to limited sites only.
For Example: if you are using your SBI credit card online through PayPal, you will be asked to authenticate your credit card for every merchant where you are trying to make the transaction.
Measures to Safeguard Credit Cards Online Transactions
Banks and government agencies are always on the look-out for fraudsters or planned cyber-attacks. They will notify you if they suspect any fraudulent behavior on your account. Still, for good measure you should know about basic security protocols that will secure your online transactions.
Use Trusted/Secure Websites – Conduct online credit card transactions on trusted websites only. Also ensure that the payment page is secure; that is, it uses https:// protocol instead of http://.
Don’t conduct transactions from public computers – Public computers are not secure. They might have viruses or Key loggers that will record your credit card information. You further increase your risk exposure if you save your account information on such computers.
Regularly update your Operating System & anti-virus software – Software companies regularly update their databases against the latest threats. Therefore, it is important that you keep your applications and software updated.
Set a Strong Password – Use a strong password by incorporating small letter, capital letters and special characters. Also, update them on a regularly.
Match Billed Amount to Card Statement – Compare the amount on your purchase receipts and billing statements so that the merchant does not trick you into paying more. Inform the bank in case of any discrepancy.
Scratch off the CVV Number – The CVV number is the 3 digit number present on the back of your card below the black strip. This number is required to successfully conduct an online transaction. You may remove the number as a security measure.
Dispute a Transaction – Credit cards let you dispute a transaction. When the application is approved the card company will reverse the payment. You may use it in case the merchant fails to fulfill his/her part of the deal. Debit and cash transactions require you to file complaint at the consumer court to get your money back.
Avoid storing credit card information on sites – Don’t store your card details on e-commerce websites or e-wallets. You will make the hacker’s work easier as they can readily use your card information.
Monitor your Statement Balance – The best way to safeguard yourself against fraudulent card usage is to regularly check your statement balance.
Fraudsters are always trying to find new ways to cheat people out of their money. But don’t let that stop you from conducting online transactions via credit card. As it is still one of the safest and most convenient ways to transact. Instead, secure your card details and follow the guidelines mentioned above to reduce your risk exposure involved in online transaction.