Top 6 Secure Payment Methods

  • By Steven
  • Published: Apr 23, 2024
  • Last Updated: Apr 29, 2024


With cyber threats on online payment methods becoming more common in today's digital age, ensuring that payment systems are secure and sensitive information is not hijacked when making payments has become ever more critical. To ensure that you choose the right option when making payments online or physically, we have compiled a list of the top 6 most secure payment methods. These payment options prioritize security, offering robust features and protections to safeguard your financial data.
Secure Payment Methods

Understanding Secure Payment Methods

Ensuring the security of payment methods is an integral part of building credibility, improving customer loyalty, and hastening the conversion process for customers of both online and physical businesses. Therefore, companies should be invested in safeguarding shopping experiences for their customers.

If you are looking to buy products online or physically at a location, one key security feature to look out for in the payment methods offered by the seller is a multi-layered security system, such as combining any two of authentication, encryption, and tokenization. While a multi-layered system can be deployed in varying modes, the main aim is to ensure that customers are afforded another chance to verify the legal status of their transactions, reducing the risk of fraud.

Specifically, you should verify that your payment method uses an address verification system, card verification value check, and 3D secure authentication. If a payment method uses an address verification system, you will be required to submit your billing address when completing payment for purchase, and the system will match the postcode to the address associated with the card. If a card verification value check system is in place, the system will require you to submit a card security code or card verification value (CVV) to verify the card's information. The CVV is typically a 3- or 4-digit number printed on the back of the card. If an online payment method applies 3D authentication, you will be asked for your banking password or an authentication code on the card provider's 3D secure page. The 3D secure page will be prompted after you enter information such as your billing address and CVV number before the payment is processed.

The 6 Most Secure Online and In-Person Payment Methods

With the demand for e-commerce transactions rising and online shopping scams one of the most commonly reported scams worldwide, it is crucial that businesses and companies protect their information. In a similar vein, persons shopping online and in physical stores should consider the following safe payment methods when making purchases:

  • Credit Cards: With the average United States citizen possessing three or more credit cards, credit cards are a popular payment method online shoppers use. This option offers top security features like encryption and fraud protection measures to ensure that personal information associated with the card remains secure. Federal law also keeps the credit card payment option as one of the most commonly used payment methods. 

According to the Federal Trade Commission, the United States government protects credit card users as they cannot be liable for more than $50 on fraudulent charges. Some credit card issuers in the United States also let users request virtual card numbers in order to protect themselves when shopping online

  • Automated Clearing House (ACH) Payments: Automated Clearing House payments are money transfers from one bank to another. It is federally regulated on an electronic network and is usually available at all banks in the United States. To use an ACH to receive payment, you need a bank account and routing number. Payments made via ACH pass through clearinghouses and are subjected to stringent regulations to ensure safety
  • Digital Wallets: If you have a digital wallet, you can perform transactions online without reentering your card details every time you transact. A digital wallet allows you to store and manage your cards (debit and credit cards) on your digital device. Digital wallets are safe since the application uses several complementary protection layers.

Making payments with digital wallets often requires multi-layered authentication to ensure their safety. Prior to making a payment, you must unlock your digital device with a password or biometric data, such as a face ID. Afterward, when confirming payment, you must verify your identity again using biometric information or a password.

Furthermore, digital wallets use safety features such as data encryption and tokenization. Encryption encodes the data involved in the transaction process, while tokenization substitutes information such as the card date with unique one-time use tokens to ensure data safety

  • Prepaid Cards: Prepaid cards are typically created for limited-time use. Similar to virtual cards, they are loaded with funds before use and are not linked directly to the user's bank account. Since prepaid cards do not share sensitive information with users' bank details, they are safe to use as fraudsters are unable to exploit users' bank information. If a prepaid card is stolen, only the funds transferred to the card for use can be stolen.

Prepaid cards are usually created for specific purposes and can be linked with a specific retailer. In such cases, prepaid cards cannot be used for other spending types as they are retailer-locked

  • eChecks: eChecks used for in-person payments work in a similar way to ACH payments. Otherwise called electronic checks, eChecks, unlike ACH payments, are often used for recurring payments, such as rent payments, and are typically used for one-time expenses. eChecks uses encryption technology like ACH and is safer than physical checks in that fraudsters cannot steal them
  • Contactless Payment Options: A contactless payment is an in-person payment type that allows users to perform in-person touch-free payments using specialized technology, such as Near-Field Communication (NFC). Some tap-to-pay credit cards and mobile wallets leverage the tokenization feature available via NFC technology to prevent fraud and ensure user data remains safe during payment transactions

What Makes a Payment Method Secure?

Most secure payment methods typically use the following technologies to ensure the security of transactions:

  • Tokenization: Tokenization in payment security refers to a process whereby sensitive data generated or used in the payment transaction process, such as credit card numbers, is replaced with unique tokens generated by a secure program or system. The tokens reference the initial payment information and have no intrinsic value if compromised. They cannot be used to perform fraudulent transactions or engineered to obtain the initial payment information. This feature reduces the risk of breaches and unauthorized access by unqualified individuals and is done in compliance with industry regulations
  • Authentication: Authentication technology is one of the fundamental features of payment security. Authentication refers to verifying a user's identity when the individual is attempting to complete or access a transaction. Authentication can be in the form of single-factor authentication, two-factor authentication, or multi-factor authentication. 

Single-factor authentication usually requires a password or PIN to identify the user attempting to complete or access a transaction. Two-factor authentication, also called 2FA, requires two identification forms, such as a password and a one-time code, to confirm the user's identity. Multi-factor authentication combines three or more identification forms, which may include physical tokens, security questions, and biometric data

  • Data Encryption: Encryption is a key component of any safe payment method. It converts payment information provided into a scrambled code that deploys an algorithm and encryption key to unscramble the data. It transmits data through protocols such as Transport Layer Security (TLS) and Secure Sockets Layer (SSL). SSL is a communication protocol that creates a secure connection between two devices or applications. It is commonly used to encrypt data transmitted to prevent the exposure of sensitive information such as names, card numbers, and addresses. TLS is a more recent and efficient version of SSL designed to improve on the vulnerabilities of the former. Both technologies use digital certificates to facilitate the handshake process and establish encrypted communication between two devices or applications

The Role of Payment Gateways in Security

A secure payment gateway is fundamental to providing an enjoyable shopping experience to online shoppers. It enables businesses to process card transactions safely by authenticating and authorizing online transactions. This is achieved by creating a secure channel for transmitting transaction information between customers and businesses. Key components of payment gateways include encryption, tokenization, authentication and fraud protection, and compliance with PCI DSS and other relevant industry standards.

Which Payment Option Can Offer Additional Security Like Fraud Protection?

Many payment methods offer fraud prevention features and other additional security measures to keep customer and company data safe. One of these options is a credit card, which comes with a zero-liability feature that protects users from unauthorized transactions in situations where the cards are stolen and used fraudulently.

Digital wallets also use tokenization and multi-factor authentication mechanisms to transmit sensitive transaction or payment information securely. Digital wallets also offer another layer of security in biometric data authentication to prevent fraud.

You can activate additional security features on your card by enabling 2FA (two-factor authentication) or multi-factor authentication, setting up transaction alerts, or adding a biometric authentication option to access and authenticate transactions.

Credit Cards Fraud

Credit Cards: Built-in Fraud Protection

Making online payments with credit cards offers solid protection against fraud, especially if your card provider uses the 3D Secure protocol. Credit card companies and banks monitor transactions done with their cards for unusual transaction patterns. Companies block suspicious transactions that do not follow the pattern associated with a card. The card-issuing company may reimburse you upon investigation if fraudulent charges are made on your card.

Credit card companies also offer chargeback options if you fail to receive products or services paid for, if the products or services are not what you expected, or if billing errors occur. Also, if your credit card is used without your permission, your issuing company will either cap your liability at a low amount or refrain from holding you responsible. Besides the zero-fraud liability coverage available from credit card issuing companies, you cannot be legally liable for more than $50 in fraudulent charges in accordance with the Fair Credit Billing Act.

E-Wallets and Enhanced Security Features

If you are considering using a digital wallet or e-wallet to shop online, Google Pay, Apple Pay, and Samsung Pay are some of the most reliable and secure options. These e-wallet options have enhanced security features achieved using encryption and tokenization to ensure transactions and transaction information are not hacked or compromised. This multi-layered approach makes e-wallets an attractive option for payments.

Future of Payment Security: What’s Next?

Security challenges, consumer preferences, and technological innovations have influenced trends in the rapidly changing payment industry. Payment security systems have evolved over the years as the malicious actions of fraudsters become more sophisticated. That evolution is expected to continue for shoppers to continue putting their trust in online payment systems.

With speed and consumer convenience two of the biggest drivers of innovation in the financial landscape, the use of physical cash and less convenient payment systems is expected to give way to a rise in the use of e-wallets, contactless payments, and digital currencies.

Cryptocurrency, a digital currency and payment method, is an emerging and popular option to make and receive payments. Underpinned by blockchain technology, which helps validate the transfer of cryptocurrencies, the concept of a decentralized system not controlled by a government or institution makes the adoption of cryptocurrencies appealing to many.

However, with the advent of new modes of payments comes increased risks for financial institutions and customers as fraudsters seek new ways to defraud people of their money and steal data. Hence, users must remain informed of security measures to avoid fraud as new payment systems evolve or are created.

Emerging Technologies in Payment Security

Some emerging payment security technologies include blockchain and cryptocurrencies, artificial intelligence and machine learning, biometric authentication, and open banking and APIs.

Biometric Authentication: Biometric authentication uses specific physical or behavioral features of an individual, such as face, voice, iris, or fingerprints, to verify the identity of an individual making a transaction and authorizing payments. Biometric authentication technology eliminates the need for PINs or passwords and can improve the speed at which transactions are completed as well as the overall use experience

Blockchain and cryptocurrency technology: Blockchain uses a decentralized and distributed ledger system to eliminate the need for banks or other intermediaries, thereby reducing transaction costs. Each transaction is recorded in a block and linked to a previous transaction in a tamper-proof chain-like structure. This structure streamlines the payment process, reducing the risk of fraud and unauthorized access to transaction data. While blockchain and cryptocurrencies face regulatory uncertainties and raise environmental concerns, they offer greater accessibility, faster speeds, and more privacy over traditional payment methods

Artificial Intelligence and Machine Learning (AI and ML): Although artificial intelligence and machine learning technologies have only arrived in recent years, some payment methods have started incorporating their uses in making payments more secure. AI and ML can be used in payment systems to perform reasoning, learning, and decision-making tasks. Both technologies are applicable in fraud detection, customer service, risk management, and service personalization.

Emerging Technologies in Payment Security

Staying Ahead of Cyber Threats

Payment systems handle a lot of sensitive financial and personal information, making them attractive targets for cybercriminals. Persons with malicious intents will stop at nothing to exploit system vulnerabilities to gain authorized access to payment information or steal customer data. Therefore, payment processing companies or payment systems must stay ahead of cyber threats by periodically conducting comprehensive risk assessments on their systems.

To stay ahead of cybersecurity threats, payment systems must continually monitor their systems, networks, and applications. Using automated tools, cybersecurity monitoring tools collect and analyze information from several sources, including user behavior logs, to detect cyber attacks as they happen. Automated cybersecurity tools can detect unusual login attempts, DDoS attacks, data exfiltration, and malware attacks. This real-time detection measure allows security teams to respond efficiently and immediately and remediate cyber threats.


The payment industry offers users several payment options with varying convenience and safety levels. While convenience plays a critical role in user experience, you should prioritize security over convenience when choosing a payment method. The rising wave of cyberattacks on online payment methods is another reason you should only consider secure payment methods. As technology evolves and cyber threats continue to advance, staying informed about the latest developments in payment security is crucial. By keeping abreast of emerging trends, new security features, and potential vulnerabilities, you can make informed decisions regarding protecting your financial transactions online.

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