Make Your Online Payments More Secure
By: Brian O'Connell

With the advent of Paypal, consumers are quickly getting used to the idea of making — and receiving — payments electronically. Electronic payments are cash exchanges made from your bank account to another party’s account using specialized, secure Web sites to handle the transaction. You can use e-payments to shop online, to pay a bill or to accept a payment from another party online.

Interest in e-payment systems is high. The Electronic Payments Association (NACHA) says that more than half of American adults use direct online payment systems instead of paying by check in 2009.

If you’re in the market for a new online payment service, here are five things to look for before you declare your allegiance to a payment provider.

Look for an e-payment system that ties your specific bills to your e-mail account. What could be easier than having your bills funnel right into your e-mail box, where you can just click a button to pay your monthly bills? and both offer that service — just check first to see if your phone company or favorite store participates. There’s a small transaction fee with each e-payment (50 cents for PayTrust).

Does your bank have an extensive e-payment service? Security-wise, it makes sense to have your bank handle your online bill payment needs. Some banks — most notably Bank of America (Stock Quote: BAC) and Citigroup (Stock Quote: C) do a good job of partnering with customers and service providers in handling e-transactions. A bonus: By using your bank, you’re keeping all of your financial transactions in one secure place.

Do your due diligence. Avoid any online payment services that try to get your personal financial data via e-mail. No reputable e-payment provider will use an e-mail to pester you for your bank PIN number or your Social Security number. E-mail files are highly vulnerable to hackers and fraudsters. Only provide these on a secure Web site. Another tip: Even on a secure site, ignore the “remember my password” box on your sign-in page— it’s a security risk that’s not worth the trouble.

Make sure you have access to customer service. A good e-payment site will offer you a direct line to customer service before you push the “pay now” button. If you have a question, or are unsure about a payment transaction, you’ll want access to a specialist to help you out. Look for sites with a “contact us” tab right on the payment page— that’s an e-payment company ready to stand behind its service.

Know your provider’s policy on sharing your personal information. Some e-payment services may share your personal information, unbeknownst to you. Look for a site with a clear “privacy policy” on how your personal data will be handled. Citibank, for example, says it may disclose "information about your transactions, such as your account balances, payment history, and account activity." If that doesn’t meet your comfort level, keep on looking.

Electronic payments are a fast and efficient method of exchanging money online. Just be careful about the providers you choose, and how they handle your personal financial data.

—For more ways to save, spend, invest and borrow, visit

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