4 Red Flags to Look For When Paying Online

As the digital revolution continues to transform various aspects of our lives, online payments have become increasingly popular.

A consumer study done by McKinsey in October 2023 reports that in 2023, more than nine out of ten consumers say they have used some form of digital payment over the year, a metric that has grown steadily over the eight years the study has been carried out, and with the key form of digital payment being paying online for purchases through a website browser, computer, phone or tablet.

Australians have not been left behind in paying online. With the widespread availability of internet access and the proliferation of smartphones, Australians now can make payments from the comfort of their own homes or on the go. There has been a notable decline in cash payments in recent years, with only 13% of Aussies using cash, whilst the amount raised from paying online was noted to have risen from $746 million(2018) to $93 billion in 2022 (Australian Banking Association)

However, with this convenience comes the risk of online payment scams. In this article, we will discuss four red flags to look for when paying online.

Benefits of Paying Online

The benefits of paying online are numerous. To outline just but a few:

  • Paying online saves time and effort by eliminating the need to visit physical stores or cash facilities. 
  • It also provides a higher level of convenience, as payments can be made on the go.
  • Paying online comes with added security measures, such as encryption and two-factor authentication, providing peace of mind.

Red Flags To Look Out For

  1. Payment Portal

Consumers must keep an eye out for the possibility of online scammers getting a hold of their account details when paying online.

Normally, websites that require a customer paying online will ask for information such as card details. Before paying online, be careful to check whether the website is secure, or else it could be a phishing attempt by scammers. 

Be careful when entering your card details into any site: Pexels

Before paying online, be sure to check that the site address starts with https:// as this means it is secured using an SSL certificate, and so your information is safe. Business Victoria also recommends an additional check on the address to verify whether there is a padlock at the leftmost side of the address bar. 

Also, be sure to check whether there are minor spelling errors in the URL. E,g https:cbfffapplainces.com instead of https:cbfappliances.com.au. Another warning sign to watch out for is the presence of spelling or grammatical errors in communication from the payment provider. Reputable companies take pride in their professionalism and will not send out poorly written messages. Similarly, if an email or website looks unprofessional or poorly designed, proceed with caution.

2. Lack of Customer Reviews

In this era of increased internet access and online shopping, customer reviews have almost become the standard by which many customers measure the credibility of a store before paying online. 

A study conducted by Statista in 2018, on actual customers revealed that up to 19% of customers believe that online reviews are authentic. Another 25% mentioned that they trust online reviews, in the case that there are multiple reviews to read. 

Always be sure to check the customer ratings for the site you want to purchase from Pexels

The COVID-19 pandemic, which caused a major shift in online shopping also increased the number of people that look to online reviews to measure the credibility of a store before paying online. Hence, another red flag is the lack of customer reviews or testimonials. Before making a payment online, it is a good practice to research the company or website and read reviews from other customers. If you cannot find any reviews or if the reviews are overwhelmingly negative, it may be a sign that the company is not reputable.

Be keen also to check whether the reviews are responded to, and the tone of the reviewers, and respondents as some reviews can be fake.

3. Asking for Sensitive or Unnecessary Information

When paying online, be cautious when asked to provide unnecessary personal information during the payment process. Legitimate payment providers only require essential information, such as your name, billing address, and payment details. If you are being asked for additional information that seems unrelated to the payment, it could be a sign of a scam.

Keep your personal information safe to avoid hacking attempts: Pexels

Be sure also to verify the privacy statement of the website so that you know who is collecting the information, and the intended use. If the site does not have a privacy statement or does and the details are unclear, it is advisable not to proceed with providing any sensitive personal details, or paying online. 

4. Payment Methods

Whilst there has been a great advancement in platforms for paying online, there are still some payment methods that are quite unusual to use when paying online and could indicate an online scam. Payment methods such as wire transfers, cryptocurrencies, money orders, and gift cards are some of the ways fraudsters use to steal people’s money. This is because payments made using these methods are often difficult, if not impossible to recover, and also do not have payment protection.

It is often prudent to use credit cards, or apps with payment protection such as Paypal when paying online. 

Additionally, be wary of requests for immediate payment or pressure to act quickly. Scammers often create a sense of urgency to trick individuals into making impulsive decisions. Take your time to verify the legitimacy of the payment request before proceeding.

Best Practices for Secure Online Payments

To ensure secure online payments, it is important to follow best practices. Here are three ways you can do this:

  • Always use a secure and trusted payment platform.
  • Regularly monitor your financial statements and transaction history.
  • Keep your devices and software up to date.

Take the necessary steps to protect your finances when paying online. Stay informed, and be cautious. Your financial security is worth it!

Written by Joyce O. for the CBF Store