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How to Use Third-Party Payment Services

You can use third-party payment services to make payments online and avoid giving your credit card number directly to merchants.
What is a third-party payment service?

When you use a third-party payment service, you transfer money into an online account and make payments from that account. That way, you never expose your real credit card or bank account information.

You can use these third-party payment services to buy things from online auction websites or from other online businesses and to donate money.

The most popular of these services in the United States is called PayPal, but there are others, such as Payments.

How to choose a secure payment service

Use the same guidelines for choosing a third-party payment service as you would for choosing an online retailer. To test the legitimacy of a service:

  • Find out what others say about the service: Check consumer review websites such as or BizRate.
  • Look at the payment service's website for seals of approval from TRUSTe or Better Business Bureau Online (BBBOnline).
  • Before you submit sensitive data to the payment service, ensure that the service website uses encryption. (Encryption is a security measure that helps protect your data as it traverses the Internet.) Signs that a website uses encryption include a web address with https ("s" stands for secure) and a closed padlock beside it. (The lock might also be in the lower right corner of the window.)

Use payment services more safely

  • Never respond to email messages from third-party payment services asking you to confirm account details, such as passwords or other personally identifiable information. These email messages could be identity theft scams, such as phishing.
  • Create a strong password for your account. Strong passwords are easy for you to remember but difficult for others to guess. They are at least 14 characters long and include upper and lower case letters, numbers, and symbols.
  • Do not use payment services (or make any financial transactions, for that matter) on public or shared computers or on devices such as laptops or cell phones while you are using public wireless networks. The security is unreliable.
  • Find out whether the seller is a verified member of the payment service, and for how long. Some services allow you to check a seller's rating — although these ratings cannot be guaranteed, they can be helpful.