Consumer Reports, the venerated protector of consumers interest, urges online shoppers to use virtual wallet services from PayPal, Google Checkout, or Bill Me Later in order to reduce the risk of credit card fraud and identity theft.

The article (in the January 2007 issue and online) acknowledges that the services are very convenient, but far from foolproof. Consumer Reports recommends that consumers use a credit card, rather than deduct funds from their checking account in order to maintain the same level of consumer protection they would have if the had purchased with their credit card directly.

Brand marketers at these companies could not dream up a better endorsement than Consumer Reports to raise awareness and increase comfort among the less tech-savvy consumer that have resisted virtual wallet services. Although the folks at PayPal are probably disappointed that their service was specifically recommended for auctions and smaller retailers, just when they are working to expand their merchant base.

"Virtual wallets: Safer ways to pay online"
Consumer Reports
January 2007