Ever get stuck behind a customer paying by check at the grocery store? Or get forced to make change when someone owes you their half of the dinner bill? It’s getting less frequent by the day as the digital age expands and money becomes more about 1s and 0s than paper currency.
As these online methods of payment spring up and gain popularity among the tech-savvy younger generations, older generations are increasingly wary of their reliability, deciding instead to cling to more traditional payment methods. It’s time to debunk the myths of online payments. The reality is that, since their induction into our lexicon in the late 2000s with e-tail and mobile banking, online transactions can be safer, more reliable, and less of a hassle than whipping out a wallet full of cash.
Let’s take a look at the most popular online payment services:
- PayPal — Since its 2002 IPO, PayPal has stood strong as the de facto method of online payment. It’s linked directly to your debit card or bank account, is as simple as a normal banking transfer, uses email addresses for payments, and is free for personal use.
- Venmo — When you have to make a personal transaction — pay back a friend or send money to one of your kids — this free service is simple to use. There is a 3% fee if you use a credit card, so avoid that, if possible.
- Payza — Link your credit card and bank accounts easily to securely transfer and receive money from personal acquaintances. You can even exchange currencies within the app for a fee.
- Dwolla — This app has stringent account verification practices that could include photo IDs — which might make you feel a bit safer. It’s free for transactions under $10 and only $0.25 for anything above that.
With each option, your bank, debit, and (in some cases) credit cards are linked to your account, which is typically an email address. Sending and receiving money is as simple as accessing the app, typing in an email address and amount, and hitting send. Aside from the occasional fee, depending on the service and transfer amount, the only catch is that the person you’re sending money to or receiving money from has to have their account on the same service. Meaning, you can’t send someone money on Vemno using a PayPal account.
Okay, But Are They Safe?
The simple answer is YES, they are safe to use — the more complicated answer is that, with all methods of payment, there are risks. You could always drop your wallet full of cash. Someone could steal your purse with all your credit cards in it. You could misplace your checkbook, giving any signature forger open account access.
However, there are digital methods in place for each of the above sites to help protect your identity. Most sites/apps use two-factor authentication — which means you have to provide a password and a one-time code sent to your phone or email — or fingerprint scans to ensure you have full access to your account.
In some cases, online transactions are even more secure than physical ones based on the digital trail you’re leaving as evidence that you paid or were paid. This gives you peace of mind, which is what we are all really looking for with any type of transaction.
If you are still uneasy with the idea of online banking, it’s simple to allay your fears with online account tools offered at Common Trust Federal Credit Union. We offer mobile and online banking, remote check deposits, even online security best practices to keep your accounts secure. Questions? Contact us today!