With Black Friday just around the corner, the shopping season looks set to move full steam ahead. Consumers are expected to use debit, credit cards and electronic transactions with greater frequency. The conveniences that come with using the cards and electronic transactions cannot be overstated. You get safe and convenient access to funds, rewards in the form of cashback or miles, purchase products without leaving your home, and more. In 2016, global e-retail sales amounted to $1.9 trillion and projections show a growth of up to $4.06 trillion by the year 2020.

As we move towards a cashless society, there are growing concerns about the security of digital payment transactions.

According to Francis Limousy, principal advisor at UL Transaction Security, there are downsides to digital payment methods, among them are the tendency to make impulsive decisions and overspend; risk of fraudulent transactions conducted through stolen cards; and data security breaches that can bring about massive damage to a business’ reputation and bottom line. All these suggest that we should be vigilant about protecting our own – and our customers’ – personal and data.

Limousy points out that as consumers of habit, we tend to favor simplicity, often at the detriment of our own safety. “We use well-known or easy-to-infer PIN/passwords; we use the same PIN/password in multiple places; and we store sensitive information without protection,” he says.

Limousy’s advice to reduce the risks of involvement in typical fraud scenarios includes:

  • Purchase only from websites belonging to well-established businesses; otherwise consider using a payment system, such as PayPal or Amazon Pay, which adds a layer of protection to help secure your personal data.

  • Avoid putting your card in an ATM or automatic fuel dispenser if the equipment looks altered (typical skimming scenario).

  • If possible, do not give your card to the waiter at the restaurant. Ask for payment at the table or walk to the counter. You cannot control what happens to your card during the one-to-two minutes when it is away from you.

While we must take measures to protect our personal payment data, all is not grim on the transaction security front. Limousy says that in recent years, massive investments in technology, such as in artificial intelligence, have been made by financial institutions to better manage transaction risks. The financial industry is also pushing aggressively for a technology called tokenization, he says, which allows for protection of users’ card information in the context of e-commerce.

“Initially driven by mobile commerce, tokenization will be able to replace your card number with a unique new number called a ‘token’,” he explains.

This token is then used when transacting using a mobile payment method such as Apple Pay, Android Pay, Samsung Pay or when performing a transaction online. As your real card number is no longer exchanged or stored, this limits the systemic effect of a data breach. If the token is compromised, it is useless to a criminal. There is no need to issue you a new card, as the token is created and managed by a payment processing system.

Many are not aware that the move to a digital society is really a shift from securing the payment mean (a bank note, a card), to securing the cardholder. With this understanding, Limousy predicts that most of the investments made in the future to maintain or increase this trust will be around sophisticated identification and authentication mechanisms such as biometrics and geo-localization.