The Australian Financial Regulator is warning businesses and individuals to reconsider their use of digital payment services like PayPal and credit cards as the financial sector is set to see a dramatic rise in online transactions.
In a report, the regulator said there was “unprecedented” demand for online payment services and they were “unusually sensitive to security and privacy concerns”.
“PayPal and other online payment providers have a strong reputation for providing high quality service and, in some cases, even offering personalised payments to customers,” the regulator wrote.
“As more and more companies choose to adopt the PayPal payment model, consumers will likely find their online shopping experience less secure, less secure and less secure in the future.”
The regulator said a number of online payment service providers had a high level of customer service, but added that “in the past, they have not always provided a level of security that meets their customers’ expectations”.
“While we understand that PayPal is an increasingly popular payment platform for some people, it is important to note that the PayPal system is not secure and that some of the data that PayPal collects and stores is not publicly accessible,” the report said.
“Paypal does not share customer information with third parties or third-party providers.
PayPal has not been able to ensure that its systems are secure, nor have we been able in the past to provide a level and level of personalised customer support that meets our customers’ needs.”
We have been aware of the security risks associated with using the PayPal payments system and are taking steps to make PayPal secure.
“The PayPal payment system is sensitive and we have made changes to address those risks.”
PayPal said it was “actively working to improve its customer service”.
“We’re working closely with regulators to address this challenge and are working to make sure that PayPal remains one of the most secure payment platforms on the planet,” it said in a statement.
The regulator also warned that people who use digital payment systems were less likely to pay bills electronically and had a lower likelihood of spending money online.
“People who use online payment systems are less likely than others to pay their bills electronically, spend their money on their phone or computer, or engage in a range of other online transactions,” it wrote.
The Financial Conduct Authority has recommended that businesses and people should be wary of using online payment networks.
“It’s not just about whether they are secure; it’s about what you’re putting up with,” the FSA said in the report.
“Online payment systems provide a service to consumers that allows them to send and receive money from people around the world, and in some instances, it may be more secure to use a different payment service.”
Payment companies have also been forced to take a stand on the issue of data collection.
“While the majority of businesses are not subject to this requirement, it does make sense for businesses to consider whether they should comply with this requirement,” the Financial Conduct Agency said.
“In the past there have been cases where companies have failed to meet the requirements of the Financial Services Data Protection Act (FSDPA) for certain services.”
Paypal said it “actively reviews and monitors” the security of its systems and “continues to monitor all payment service operators to ensure they comply with their obligations under the FSDPA.”
The FSA said consumers should be aware that the data they are sending is “unsecure and sensitive”.
“A number of payment service companies do not provide any level of secure information to consumers or to third parties,” the agency said.