Home > Identity Theft > A Service That Lets You Keep Card Numbers & Purchases Private

Comments 0 Comments

Ever wish you could keep your credit or debit card numbers (and the exact purchases you make with them) private while shopping online? It all seems kind of counter-intuitive. After all, how can you pay for something online without providing your payment information? Well, a new fin-tech startup may have figured out a way.

Privacy.com is aiming to letting cardholders choose which merchants they turn their payment information over to — a service many consumers may find valuable, given the slew of data breaches at big names retailers that have made headlines over the last few years.

“We believe privacy is a basic human right and it’s something that in the digital age is being eroded more and more,” Boling Jiang, Privacy.com’s chief executive, said, regarding the company’s mission statement. “There’s a tendency to overshare in our society when it’s sort of not always necessary.” He equated keying in sensitive payment information online to giving a bartender a driver’s license (which includes your address, driver’s license number and other personal information) just to prove you’re 21.

“That’s kind of a broken model,” Jiang said, given how many ways personal data can be used or monetized in today’s society. Similarly, “if you want to buy a T-shirt, you shouldn’t have to give everything else up with that,” he said.

How the Service Works

Privacy.com essentially lets you pay for items online by generating single-use card numbers that link to a verified financial account. The cards preclude you from having to turn over sensitive card information, including account numbers, expiration dates and CVV codes, to every merchant you wish to patronize. This information, should it fall into the wrong hands, could be used to perpetrate card fraud, which remains a problem worldwide.

“If you don’t share this information in the first place with the merchant, there’s no way for it to be stolen,” Jiang said.

Consumers get access to the service by opening up an account with the company, entering the minimum amount of personal information required by federal regulations (including name, email, address and date of birth) and connecting a funding source, like a checking account, debit card or credit card. Then, every time they shop online, a browser plug-in populates a merchant’s checkout page with the one-time, disposable card credentials.

There are options to configure these disposable cards for multi-use. For instance, you could set limits that prevent anyone from charging over a certain amount on a disposable card and then use it to make monthly payments on a streaming service subscription, Jiang said. While the cards are locked in terms of spending limitations, merchants can push money back onto them in the event that a customer needed a refund on goods or services. “They’re not dead numbers per se,” Jiang said, though you do have the option to “kill” a card completely. (In that instance, you would need to contact Privacy.com, who would manually process a refund.)

The company also keeps the exact nature of your transactions private since items purchased with the disposable card numbers appear on your financial statements simply as Privacy.com.

Some banks also give cardholders the option to create virtual card numbers to increase security while shopping online, so you may want to look into these options, too, if you are interested in increased online card security, (though Jiang said Privacy.com is aiming to improve on the user experience by making creating and managing disposable cards much easier.)

A Privacy Tradeoff?

Privacy.com is currently still in its test stages. A public launch is planned for later this year. The company will make most of its revenue off of swipe fees, so, initially its service will apply only to debit card purchases (made via a linked checking account) with disposable cards being issued through their bank partner (under the singular moniker The Privacy Visa card.)

You will ultimately be able to use it to mask your credit cards too. However, you’ll have to pay around a 3% fee to do so, since Privacy.com will have to pay a swipe fee to the credit card issuer. Privacy.com plans to waive this fee on certain purchases, though the specifics are still being worked out, Jiang said.

Customers who use Privacy.com may also have to sacrifice some rewards associated with their credit cards. Since your issuer won’t be able to see what exactly you bought online, you won’t earn any bonus points that may be tied to certain spend categories in your credit card’s rewards program. You would still get whatever base earnings were associated with the card, Jiang said.

Merchants also often collect data and monitor your purchases to send targeted offers or discounts to customers, so masking these details may prevent a few deals from coming your way. Of course, special offers and particularly lucrative reward programs can tempt some customers to overspend, so there could be a secondary bonus to not forking over your data, depending on your current debt levels and spending habits.

Safeguarding Payment and Personal Information

Given how data-driven our society has become, it can be very difficult to keep your credit cards and your identity, even, from falling into the wrong hands. There’s no fail-safe way to prevent becoming the victim of a data breach, but can mitigate the effects by monitoring financial accounts regularly and keeping an eye on your credit reports. (You can request your credit reports for free each year at AnnualCreditReport.com and see two of your credit scores for free each month on Credit.com.) Unfamiliar line items, like strange addresses or new loan accounts you didn’t open, are a sign of  identity theft.

More on Identity Theft:

Image: thomaslenne

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team