> Even with Square, I'd be hesitant to enter my debit card number.
Are you afraid of entering your debit card number? How do you make purchases online?
Are you afraid of entering your debit card number? How do you make purchases online?
Credit card numbers are much safer to use online than debit cards, mostly because credit card dispute mechanisms give consumers a lot more power. If a merchant behaves in an unsavory way, with a credit card you can usually just call your bank, issue a chargeback and that's the end of it. You can't do that with a debit card.
You absolutely CAN dispute charges with debit cards. The problem OP might have with debit cards could be that a fraudulent charge temporarily locks cash funds (with debit card) instead of credit availability (with credit card).
There are wide differences in consumer protections between credit and debit cards.
The list of reasons for a valid chargeback on a debit card is much more narrow than a credit card. For example, suppose you purchase a tablet online and when you get the package, you sign for it, open it, and it's a paperweight. If you charged that on your debit card you're out of luck and will have to go to small claims court. On a credit card -- especially a good credit card -- the charge would be reversed. The issue there is that you signed for the package. If you don't believe that, give your bank's fraud dept a call, and then your credit card companies.
American Express obviously is great for consumer protections but truthfully any Visa Signature card offers a competent level of service.
Personally, I would never use a debit card online (or anywhere else for that matter) and would advise anybody against it. Not to mention, you can earn some fantastic cashback/mileage benefits. My wife and I are flying next spring to Europe, first class from San Francisco, over $20k in airfare, for only $2500 out of pocket for taxes and surcharges. To earn this we've spent $40k between 2 British Air cards in 15 months.
You can dispute most debit card transactions now.
Besides the "one is availability of credit, the other, real money", there is a liability difference.
It used to be, at one point, that debit card liability was essentially unlimited but a consumer's liability for fraud on their credit card was limited to $50 by federal law (see 15 USC § 1643). Debit card liability now has a maximum as well, but your maximum liability actually depends on how quickly you notify.
If it's within two days, it's $50 liability on a debit card, but if you notify past that, they could legally make you liable for up to $500.
(There are other liability generating situations that exist for debit cards but not credit cards)
Really, it's because I use my credit card as a firewall account. If my credit card gets compromised (which has happened twice before), I have to change maybe a dozen things that link to it. It's an inconvenience, but my bank can get me a new card the next day. Worst case scenario I lose my credit card for a week or so.
If my checking account is compromised, things are worse. If my checking account gets locked, not only can I not use it, I also can't pay my credit card. I'd have to setup my paycheck (pain), rent (pain), and some other things. Then I'd have to re-link a couple of other bank accounts. While I like my current bank, I don't want to take the risk of that account being locked for a week.
The idea of giving a random website (in that I don't have an account/relationship with them) a number that provides direct access to my paycheck gives me the shivers.
You could do basically the same thing with ACH. If a payment service asked you to enter your routing and account numbers, would you be OK with that? I see it as the same thing.
In most countries, bank account numbers are effectively public knowledge, and appear at the bottom of invoices and such. The trick is that with this knowledge you can pay money in to an account, but you can't get it out - for that you need authorisation. This makes paying via echeck or direct credit very easy.
Am I right that in the US you can get money out of an account if you know the account number? If not, why the secrecy about your bank account numbers?
- these are electronic requests, so there's nothing to distinguish "genuine" from "fraudulent" ones
- you really do have all of the information that goes into an ACH payment
Really, it's much more similar to forging a check than to counterfeiting one.
1) ACH. Everyone has mentioned that already. I'd need routing and account number, and likely need to know if it's checking/savings or business/personal. Like they've said, everything that I can find on a check. You could contest it for ~ 60 days, but you'd have to sign something at the bank, and you're out the money till you do.
2) Drafts. They're like checks, but not. Some health clubs (Curves, iirc) do this as well as some other less reputable businesses. Basically, once you sign an authorization (that they keep on file, not like it gets passed to the bank or anything), they can print a check like thing and put some specific language in the signature block area, and deposit it. Typically, this is done in bulk. Often times, it's then immediately converted into an electronic equivalent check (Check21 law) and then deposited in one big file. Return rates on these are astronomical. Most banks won't touch them. They should die.
To remove money from a US account, you also need authorization. The trick thieves use is to lie about having authorization. In that case, it's fraud.
I don't know of many fraudulent transactions that can't be reversed. Even fraudulent/unauthorized wire transfers can be reversed. The bigger problem is the hassle that comes with losing access to cash while the situation is resolved.
Can someone with actual banking knowledge correct me where I'm wrong and clear up this confusion?