Security Online: How to make a safe payment for LoversPlanet services
Q: I don’t know much about your company. Is it trustworthy?
Maybe I should write a check. I’m somewhat reluctant to do a VISA transaction online unless it is a company with which I am familiar.
A: Background
Millions of buyers worldwide make payments online. We buy books, electronics, Christmas presents, toys for our kids, music and DVDs, jewelry and even groceries (check Amazon.com) – all online, having them delivered right to our door.
Without a doubt, Internet, along with telephone and television, has become an important part of our lives. Most online shoppers use credit and debit cards to pay for their online purchases. However, other methods of payment are becoming increasingly popular including direct bank payments, online checks (e-checks) and pre-paid vouchers. With direct bank payments and e-checks you authorize merchants to debit your bank account electronically, without using a credit card company as an intermediary.
Problem
One of the main concerns with the growing market of online payments is the identity theft and numerous cases of online fraud. You have to be careful who you are sharing your financial information with. There have been cases where a bogus Cable TV employee would phone random households to “verify” their credit card information. This information was subsequently used to make illegitimate purchases. With internet it’s even easier for bogus merchants to steal your money – they have developed various strategies to convince you to provide all the details making you believe you are dealing with a reputable company. How can one make sure that the payment they are making is secure and their online shopping experience is safe? There are two possible solutions.
Solution 1
You can try to establish the legitimacy of the merchant company. You can see if the company has a “real” presence: an address and a telephone number. You can phone them and ask for more information. However, establishing credibility has a cost. Administration of the phone calls, a customer service person providing the information – all this increases the costs. If per unit price is fairly low, it may not be economically feasible for the merchant company to provide credibility-related administration. Moreover, you can never be 100% sure about any specific smaller company. If the company doesn’t have a well-established brand name like Wal-Mart or Amazon, uncertainty will always exist in terms of its legitimacy.
Solution 2
A solution that works best at present is provided by a few well-established, reputable online payments intermediaries, such as Paypal and Click&Buy. These companies have made substantial investments to create a trusted brand. Their clients are merchants, on one hand, and individual clients on the other. When a client wants to purchase something from the merchant, a payment is made to Paypal. Paypal then makes a payment on behalf of the client to the merchant.
While this sounds very simple, it has a number of key advantages:
- You provide your financial information to Paypal and this information is not disclosed to any merchant you make payments to in the future.
- You provide your financial information only once and then you can use your Paypal username and password to make multiple payments at multiple online locations.
- Paypal, over the years, have developed extensive anti-fraud policies. They substantially reduce the probability of risk for both merchants and clients. For merchants, for example, they collect extensive information for fraudulent transactions which can then be evaluated to identify similar transactions in the future. For clients, Paypal actually do all the checking to make sure that the merchant is legitimate. They also rank merchants by assigning a special credibility score which reflects every merchant’s trustworthiness. A merchant, who accepts payments through Paypal, is verified by Paypal and has a verified address filed with Paypal. It is certainly a better bet than a company which you attempt to verify yourself.
- You are in full control of the payments you make when you pay with Paypal. If you subscribe for a service, such as a dating service subscription, you can log on to your Paypal account to see the status of your subscription and the history of your payments. You have an option to cancel your subscription with Paypal as opposed to contacting various merchants. Once you cancel, you will not be charged again by the merchant because the merchant doesn’t have your finical information. And finally, if you have a billing problem and you are not able to resolve this with any specific merchant, you can phone Paypal and they will be willing help.
- You are free to choose any payment method you wish to use without compromising the security of each transaction. If you wish to pay by credit card, you can use a credit card and you don’t have to worry about sending checks to be on the safe side. With Paypal you can fund your Paypal account with any major credit card, and in most countries you can make payments directly from your bank account. With Click & Buy you can use any major debit or credit card, direct banking, and in some countries you can make a charge to your phone bill. For example, in United Kingdom you can charge your subscription payment to your BT Phone Bill, in Switzerland, you can charge your payment to your Swisscom cell phone account. In Germany, you can purchase pre-paid cards and fund your Click & Buy account to make online payments.
How can I pay for Loverspalnet.com services and make sure my transaction is safe?
- Visit Paypal & Click & Buy websites and see which company you are more comfortable with. Paypal is very big in US. Founded in 1998, Paypal is an eBay Company with 100 million account members worldwide. Paypal is available in 103 countries and regions around the world (more about Paypal). Click & Buy is more powerful in Western Europe, although their US presence is increasingly significant. Deutsche Telekom AG has a stake in Click & Buy parent company (more about ClickandBuy).
- Open a client account directly with one of these companies. Follow all the steps and obtain your username and password for your payments account.
- Add a payment method to your account with either Paypal or Click & Buy. You can add a credit card, use a check, or your bank account. Again, all information is provided directly to Paypal / Click Buy, on their website, using a highly secure connection.
- Now you are ready to make payments online: eBay, Amazon, Loversplanet.com! All you have to do is find a relevant payment button and follow the link (on Loversplanet.com you can find this link by clicking “Get Subscription” after you sign in). You will then be redirected to Paypal or Click&Buy secure website to complete the payment. You would already have an account, so you will simply enter your username and password and click “Pay”. That’s it!
Online Payments: How it works
When you follow the payments link (e.g. “Subscribe with Paypal”) you are redirected to Paypal’s secure server where you can complete the transaction. You will submit your payment account username and password outside the merchant’s website, i.e. outside Loversplanet.com. When Paypal verifies the validity of your account and the availability of funds, they will debit your account with the amount of payment, you are requesting to make. They will credit merchant’s account with the corresponding amount and send the merchant an encrypted message directly, to inform that your payment is valid. Your financial information, such as your credit card number or bank account number, will not be disclosed. When Loversplanet.com server receives this message, which includes your Loversplanet.com ID, a subscription will be issued to you automatically. Paypal acts as a guarantor of your payment and the shield for your sensitive financial information.
Tags: Lovers Planet, online security
