Like HowStuffWorks on Facebook!

How Electronic Payment Works


Concerns About Electronic Payment

The main drawbacks to electronic payments are concerns over privacy and the possibility of identity theft. Fortunately, there are many safeguards available to protect your sensitive personal information from falling into the wrong hands.

You can defend yourself against identity theft by using virus protection software and a firewall on your computer. You should also make sure that you send your credit card information over a secure server. Your Internet browser will notify you when a server is secure by showing a lock or key icon. In addition, the URL on a secure site is usually designated by the prefix "https" instead of "http." Retailers do their part by using data encryption, which codes your information in such a way that only the key holder can decode it.

Privacy concerns aside, some people simply dislike making electronic payments. They find the setup too time-consuming and don't want more logons and passwords to remember. Others simply prefer the familiarity of writing checks and dropping envelopes in the mail. Regardless of these concerns, electronic payment will likely continue to rise in popularity.

Next we'll learn how to set up e-payment for your small business.