What Is Privacy?
Privacy provides multiple financial tools to keep your accounts secure and save you money, the most prominent of which is a feature that creates virtual, one-time credit card numbers you can use to make purchases online.
The company is based in New York. Andy Roth, Boling Jiang, David Nichols and Jason Kruse founded Privacy.com in 2014. Between the four of them, they have a tremendous amount of experience in the financial world.
Roth is a good example. He was a cybersecurity expert at a U.S. Security and Exchange Commission security roundtable in 2014, chief privacy officer at American Express and he has a law degree from Fordham.
The company has appeared in articles on several popular sites like TechRepublic, who hailed Privacy.com.
“It can be tough to feel safe online. Your computer could be compromised, someone could intercept sensitive data, or a data breach could spill your information despite everything you do to stay safe,” TechRepublic wrote. “The more layers of anonymity and security you can put between you and the internet the better, and here’s one more way to do that: Privacy.com.”
According to Statista, the American online shopping business is a $322 billion industry. With so many purchases taking place, Privacy.com seems to be a relevant and needed tool.
But how exactly does it work? What are virtual card numbers and how can you use them to keep your personal information safe?
In this review, we’ll cover how Privacy.com works, including how their virtual cards work and some of the other services they offer.
What Is a Virtual Card Number?
When you sign up for Privacy, you’ll have to give the site access to your bank’s checking account. At the time of publishing, Privacy didn’t link debit cards or credit cards.
The website will be added to your Chrome browser as an extension you use whenever you buy something online.
One-time use virtual card number
Whenever you head to a website like Amazon and pay for something, the Privacy.com extension will generate a virtual card number you can use to make your payment.
This virtual card number lets you protect your checking account two ways. First, you don’t have to provide a debit card number that could be stolen. Second, you can provide fictitious name and address; Privacy will put the transaction through, regardless.
It’s conceivable that, for as long as Privacy.com exists, never again will you have to enter any of your personal information onto a website through which you’re making a purchase.
According to the site, the card number that’s created for the purchase will self-destruct after two minutes. If, in the off chance that someone steals your virtual card, there’s a really good chance they won’t have time to make fraudulent purchases.
Now, the site does point out that there are a couple of purchase types for which you shouldn’t use one-time virtual cards:
- Hotels, car rentals, or airfare purchases
- Pre-order sales
- Merchants you spend with regularly
- Backordered items
Merchant-specific virtual card number
For merchants you spend with regularly, Privacy suggests setting up a merchant card, which is a virtual card that can only be used at one merchant. If someone steals that number, they can’t use it anywhere else.
Virtual card numbers for recurring payments
Their service can be used for recurring payments, too. Let’s say you want to use Privacy.com to pay for your Netflix subscription. The site will create a virtual card dedicated to that recurring payment. Also, you can set a spending limit for that virtual card.
So, as their site points out, you can tell Privacy that your Netflix charges should be capped at $13. In the event that you get double charged in a month or overcharged for your recurring payment, Privacy.com will not let the transaction complete.
Their FAQ section notes that any returns you make will go directly to your checking account and take between 1 and 3 days to appear.
A Quick Word About Privacy.com’s Transaction Log
The website tracks all of your transactions much in the same way that your bank does. The big difference between your bank and Privacy.com is that your transactions can fall into “pending” and “settling” categories.
Pending is well known – it means your transaction has registered on your end but that the merchant hasn’t approved it yet.
Here’s how Privacy defines a “settled” transaction:
“A ‘settling’ charge has been confirmed by the merchant and funds are in the process of transferring from your funding source account. Once these funds are debited the transaction will be marked as ‘settled.’”
If you want to cross-reference your transactions through the site, you can always log into the checking account you have with your bank and track your purchases.
What Kind of Security Does Privacy Use?
Because Privacy.com portrays itself as a secure way to make payments online, it’s important to understand the secure framework from which they provide their virtual cards numbers.
We read through the FAQ section to get an idea of how all of it works. Basically, Privacy uses bank-level encryption to safeguard your data. The information that’s actually used to make the payments is encrypted into a token that’s sent to the merchant and used to pay.
This way, the merchant nor anyone who has hacked your transaction can see any personal information about you. This acts as a third layer of protection on top of your ability to create a fake name and address, and the two-minute window you have to use the virtual card number the site creates.
The personal information you give Privacy, including your bank account number and routing number, as well as your name and address, are, according to the company’s site, “stored … in private networks in at least three separate geographic locations and is inaccessible from the outside world.”
In other words, the company provides a robust and multi-level security solution to protect your private data.
How Privacy.com Compares to Other Virtual Card-Number Services
Privacy.com’s main competition comes from banks. Two good examples of bank competitors are Citi and Capital One.
Citi’s virtual card number service is limited in that it’s not available to all of its credit card customers. However, the inherent benefit is that you can use it with credit cards, which is something you can’t do with your Privacy.com account.
Also, Citi does virtual card numbers for one-time purchases but does not have options for recurring payment, spending limits and merchant cards.
Capital One’s virtual card number service is linked to its virtual assistant, Eno. This app creates your virtual number as a merchant-specific number. So, the number you get when you buy something from Amazon is something that you’ll use anytime you make a purchase on the site.
You do, however, have the ability to turn the number off in the event that a site is hacked.
Of note is the fact that both of these services require you to enter your billing information, which is something that Privacy.com doesn’t require you to do.
In our opinion, Privacy.com is a great choice for creating virtual numbers because you have multiple options for the types of numbers you can use, as well as the ability to set spending limits on recurring transactions.
We want to point out, however, that providing a fictional name and billing address is somewhat irrelevant if you’re shipping your purchase because you’ll have to enter your address anyway.
The Final Word: Pros and Cons of Privacy.com
We believe, based on our research, that this site’s greatest strength is the variety of situations it serves. You can use their virtual card numbers for one-time transactions, for transactions you make often with one merchant and for recurring transactions.
The downside of the card is a little subtler. If you’re a credit card user and you like to get rewards for your spending, you’re going to have to sacrifice that since Privacy.com requires that you link to a checking account.
Now, this downside is tempered by the fact that we’re only talking about online transactions. There are multiple big spending categories in most people’s budgets that aren’t online purchases:
- Eating out
- Groceries (Amazon Fresh, on-demand grocery delivery not included)
- Doctor’s visits
You can add more categories to this list – clothing and entertainment are good examples of things you might buy online by might not.
In our opinion, we think that Privacy.com is a good choice for you if you don’t mind sacrificing credit card rewards in order to ensure secure online transactions and you want some safeguards against cable companies and internet companies who may add extra charges you aren’t aware of.
» For Further Reading: How to Avoid Scams When Shopping Online
I signed up for a trial membership with an online company using a card generated through Privacy.com. I had set a maximum limit on the card to ensure that they couldn't run charges that I didn't authorize.
I later canceled the membership (and got an email confirmation from that company). The company billed me anyway for a continuing subscription...a fraudulent transaction. Privacy declined the charge because it was over the limit that I had set.
BINGO! It works! I couldn't be happier!
Bottom Line: Yes, I would recommend this to a friend