CNBC posted an article that aims to convince readers that bank-based cards, particularly debit cards are risky. The article suggests consumers would be wise to use a virtual prepaid card for on-line transactions around the holidays:
For holiday purchases, debit is still a big player. Among millennials, 56 percent plan to shop with a debit card, versus 41 percent of shoppers overall, according to a NerdWallet.com analysis.
That habit can be great for your budget, but it’s one consumer advocates warn against with cyberthieves keen to capture your personal and financial information.
“Our spiel is, don’t use debit cards. Period. End of story,” said Beth Givens, executive director of Privacy Rights Clearinghouse, a consumer advocacy group.
The reasoning cited for the damning of debit cards over other payment choices has to do with the differences in the applicable regulations, not how unauthorized transactions are managed in reality by financial institutions.
The article further suggests that rather than using a bank debit card, consumers should use a payment vehicle from a non-bank provider to be more secure:
Cautious consumers might also look to using their preferred debit or credit card via third-party payment processors including Apple Pay, PayPal and Amazon Payments. Those services keep your card details secure, rather than sharing them with the merchant when you make a purchase, he said (Matt Schulz, senior industry analyst at CreditCards.com.)
Issuers need to get in front of this message before the press has everyone thinking that banks and their products are somehow less safe.
Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group
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