Is it safe to give someone my bank account number?
Financial transactions have come a long way since the days of chequebook and pen. Payments are now made instantly through apps or over the phone. However, convenience comes at a cost.
The uninitiated can easily fall victim to scams or, at the other end of the spectrum, miss out on the convenience of using these payment methods from fear of getting duped.
First let's clear up one myth - giving out your bank account number and BSB is fine.
"There is no issue in giving out your BSB/account details as it's only possible to deposit funds rather than withdraw funds," an ING spokesperson told Money.
"If an unauthorised debit occurs then the debiting institution is liable."
When using a credit card, make sure to only use secure sites of trusted businesses.
You should never email your card details, and only provide card details over the phone if it's a trusted third party or merchant.
New payments platform
The first few months of Australia's New Payments Platform (NPPP) - Australia's New Payments Platthe now standardised payments system for Australian financial transactions - underscored the security concerns around the new era of electronic payments.
Soon after launch, it was subjected to a series of hacks that exposed the PayIDs of thousands of customers, representing significant data theft.
However, consumers should rest easy knowing that no money was actually taken.
When you create a PayID your financial institution will ask you to verify your identity to prove you are the rightful owner of the information you are basing your PayID on, as well as the account you are linking it to.
You will also be asked to confirm what name is displayed when a person makes a payment to your PayID. This means that when a person is making a payment to your PayID, the name that you have chosen will be also be displayed, which has to be confirmed before the payment is completed.
"This additional confirmation step was intentionally built into the NPP payment process to reduce the likelihood of mistaken payments," says an NPP spokesperson.
Red flags to look out for
The government's Moneysmart website outlines some of the red flags to look out for, including:
- A payment to a person or company you don't know;
- A cash withdrawal from a place you've never been;
- A transaction on a date when you didn't use your account;
- A payment made twice.