What a Difference a Millennium Makes: A Lesson in Financial Literacy for the New Century

In the last millennium, i.e., 20 years ago, financial life was much simpler for consumers.

If you wanted to deposit a check or withdraw cash from your account, most likely you would visit your neighborhood credit union or bank branch to conduct those transactions and not think twice about it. While not as convenient as mobile and online banking today, there was less concern about identity and other forms of digital theft because there really wasn’t any.

Change in the financial world as we know it today really began in earnest on January 9, 2007, when Steve Jobs unveiled Apple’s iPhone and the financial industry was suddenly at the precipice of a new era. Since then, the way we conduct our financial business – especially mobile banking – has continued to rapidly evolve in many different ways. In the process, it has become more complex and more challenging from a security perspective.

Here are four practical tips in the general arena of financial literacy, and specifically on the latest payment technologies and fraud protections.

1.Stay Informed on New Mobile Payment Methods 

There is so much happening on almost a daily basis in the digital payment arena that it’s nearly impossible to know everything. When you think you know everything, everything changes.

Currently, the three major digital payment methodologies that pretty much cover the financial and retail industries are Apple Pay, Samsung Pay and Google’s Android Pay.

All three of these payment applications for mobile devices have their advantages and disadvantages. According to a July 2016 Newswax.com story, “In many respects, Apple Pay, Android Pay, and Samsung Pay are similar; the underlying idea is the same, the implementation is similar, and the goal is to enable virtually any consumer to use these services, which means they have to be fool proof or fail. They rely on tokenization to eliminate sensitive data transfers.”

What is tokenization? It’s a security process of substituting a sensitive data element (your account number) with a non-sensitive equivalent – a token – that has no extrinsic or exploitable meaning or value. Additional innovative security features are available as well – including finger printer scanner – that you will want to consider when shopping for your payment app.

2. Find Out More About Card Controls

We are starting to see more means of self-securing mobile payments cards.

For instance, CardNav by CO-OP lets debit and/or credit card users set how, when and where their cards can be used via smartphone. Users can instantly set their card preferences and receive convenient, in-app updates to monitor card usage and track spending.

You can use the CardNav app to turn a payment card on and off, set a location boundary where the card can only be used, restrict the card to certain types of merchants and set spending limits to help you keep expenditures in check.

3. Embrace the Protection of EMV (“Chip Cards”)

EMV cards, or more commonly “chip cards” because of the microchip embedded in the plastic, are accepted by most U.S. retailers and financial institutions to enhance the security of point-of-sale purchases and ATM transactions.

(“EMV” originally stood for “Europay, Mastercard, Visa,” but like many three-letter acronyms, its rather a word in itself now, as opposed to standing for anything.)

According to creditcards.com, 2016 research by Mastercard and Visa shows that counterfeit payment card fraud has already declined significantly in the U.S., as reported by EMV-enabled merchants.

4. Be Vigilant

Our financial life is so different today than it was 20 years ago, when the danger of fraud did not seem to lurk around every financial corner.

Although inroads are being made against fraud with such measures as chip cards, fraudsters are not retreating. According to newly released data from the Global Fraud Attack Index, worldwide fraud is in fact rising quickly. The rate of fraud attacks in the third quarter 2016 increased 62 percent from a year ago; the data show that 39 of every 1,000 transactions are subject to fraud.

Today, consumers must be aware of all their financial transactions, pay attention to finance records such as account statements, be protective of personal information such as PINs and passwords, and be cautious at financial access points such as ATMs.

Stay vigilant and cautious, yet – but also stay curious and keep a sense of wonder. The new century has barely begun and finance and payment forms have only begun to change.