Although Internet security breaches have gotten a lot of press, most
vendors and analysts argue that transactions are actually less dangerous
in cyberspace than in the physical world.
That's because a great deal of
credit card fraud is caused by retail sales employees who handle card
numbers. E-commerce systems remove temptation by encrypting the numbers
on a company's servers. For merchants, e-commerce is actually safer than
opening a store that could be looted, burned, or flooded. The difficulty
is in getting customers to believe that e-commerce is safe for them.
Consumers don't really believe
it yet, but experts say e-commerce transactions are safer than ordinary
credit card purchases. Every time you pay with a credit card at a store,
in a restaurant, or over an 800 number--and every time you throw away a
credit card receipt--you make yourself vulnerable to fraud.
But ever since the 2.0
versions of Netscape Navigator and Microsoft Internet Explorer,
transactions can be encrypted using Secure
Sockets Layer (SSL), a protocol that creates a secure connection to
the server, protecting the information as it travels over the Internet.
SSL uses public key encryption, one of the strongest encryption methods
around. A way to tell that a Web site is secured by SSL is when the URL
begins with https instead of http.
Browser makers and credit card
companies are promoting an additional security standard called Secure
Electronic Transactions (SET). SET encodes the credit card numbers
that sit on vendors' servers so that only banks and credit card
companies can read the numbers.
No e-commerce system can
guarantee 100-percent protection for your credit card, but you're less
likely to get your pocket picked online than in a real store.