Five ways to shop safely on a smartphone

Nowadays, you might be tempted to enter your credit card information and purchase that new book or song via your mobile phone. Apple's iPhone, T-Mobile's G1, and even RIM's BlackBerrys encourage mobile shopping.

In addition to better smartphones, a new breed of shopping apps are also facilitating mobile shopping. Merchants like Amazon.com and Sears let you shop directly from your phone. Amazon's app for the iPhone even lets you take snapshots of the products you wish to purchase. It then searches Amazon's database for that product. If the application can't find the exact product, it locates a similar model.

When people see a good deal, they'll buy it whether it's on a mobile device or a home computer, says Joseph Porus, an analyst at research firm Harris Interactive.

Security issues in smartphones will not deter shoppers, agrees Hossein Mousavi, CEO of mPoria, a mobile-commerce company that facilitates shopping transactions through mobile phones. "Just because it's a 'smart' device doesn't change the story," he says.

So as the impulse sets in to snag that hot deal, what can you do to protect yourself from credit card theft? Here's their advice:

Purchase from reputable vendors
"If it's a Sears or an Amazon, you're talking about vendors with great reputations, but if it's a merchant you've never heard of, do your homework before placing an order," Mousavi advises. "If you're unfamiliar with a merchant, apply the same level of vigilance as you would online," Mousavi says.

Shop on encrypted pages
Look for the familiar "lock" icon in your browser when entering sensitive information over your mobile. This symbol confirms that the page is encrypted. Smartphone browsers use the same standard of encryption as the regular Internet, Mousavi says.

Use a third-party checkout service
See if the merchant uses an intermediary checkout service such as PayPal. According to Mousavi, completing a transaction through PayPal or a well-regarded merchant is equally safe.

When you make a purchase through PayPal, credit card information doesn't get transmitted to the merchant, only a PayPal confirmation number. The merchant then settles the sale with PayPal.

Don't store sensitive information
Avoid storing your credit card information on a merchant's servers. If your phone is stolen, credit card numbers and other personal information may be retrieved from the device. Even though merchants encrypt this information on their servers, the danger of stolen passwords still exists. "I'd much rather have my credit card number in my wallet than on different servers," Mousavi says.

Protect your screen from onlookers
As with a laptop, when you're entering your credit card number on your phone in transit, be sure nobody is peeking over your shoulder, Mousavi warns.

Merchants like Shop4tech.com and Meritline.com offer privacy screens for various cell phones. These covers make your phone's screen appear dark to anyone who may be glancing over your shoulder.

Final thoughts
Mousavi says the same principles of online shopping apply to mobile purchases. "If you could shrink down your laptop to the size of your phone, would it be safe to still shop through it? Of course — that's exactly what's happening on your smart device," Mousavi says.

— Brian T. Horowitz