THE BLOG
10/03/2014 10:06 am ET Updated Dec 03, 2014

Payments 101: Consumer Tips for Safe Shopping

Here are a few numbers to consider. Last year's Target breach, which resulted in the loss of more than 40 million customer debit and credit cards, has cost the company more than $148 million dollars. This doesn't included losses related to lost business and impact on the company's stock price. Just last month, Home Depot announced another major breach. While it is not yet known how many customers were affected, some estimate that more than 60 million card numbers were lost. Both of these breaches were caused by a variant of the same malware that steals account data from the business' payment terminals.

If anything, both of these breaches serve as a huge wake-up call for both businesses and consumers when it comes to in-store transactions. Businesses need to determine how to protect their systems from these types of breaches. There are a number of solutions in the works, a few of which I wrote about in my last Payments 101 post. However, consumers also need to learn best practices to better protect themselves.

There are a few simple things that consumers can do to get started and protect their purchases from these types of breaches:

  • Keep an eye on your credit and debit statements for odd charges. This includes small transactions. Cyber criminals often test accounts with small transactions to make sure the cards are active before making a big purchase. If you see a suspicious transaction, report it immediately and request a new card.
  • Consider an alternate payment option. Consider paying with credit cards or cash when making in-store purchases. Cash can't be breached and credit card companies cannot hold you liable for fraudulent purchases made on your card. This makes it a lot easier to fix fraudulent charges compared to a fraudulent debit card charge where money is taken directly out of your account. In this case, you have to personally recoup any losses from your bank. Cash, credit and debit cards are not the only payment options. With last week's announcement of Apple Pay, near-field communication (NFC) is front and center as a more secure payment option. NFC is a type of radio communication that allows you to use your smartphone to make payments at NFC-enabled payment terminals. Because the NFC radio is extremely short range (i.e. you have to touch the phone to a terminal to make a payment), many experts say that NFC is inherently more secure than your typical card transaction.
  • Keep an eye on credit and debit card numbers and personal information with an identity protection service. The Home Depot breach resulted in the loss payment information. The Target breach also included personal information like email addresses, names and home addresses. An identity protection service can alert you when your payment cards and personal information has been compromised. Both Home Depot and Target have offered a free year of identity protection to affected shoppers. Take advantage of these offers.

Believe it or not, these simple security practices can help protect your personal information in the event of a massive data breach. Educate yourself and others on best security practices so your information is safe when the next breach happens.