Wallet Hacks

How to Build A Bank Account Firewall

Years ago, if you wanted to send money to someone online, you used Paypal.

Years ago, if you wanted to hack a system to steal money online, you tried to hack Paypal.

Nowadays, you have a lot of payment processors, a lot of money transfer systems, but the attacks and the phishing never stops.

I'm pretty savvy when it comes to phishing emails, those emails that trick you into logging into a fake site, but I try to set up systems as a backup to my own vigilance. No one is 100%.

So today, I want to share a very simple concept you can implement and it's called a firewall bank account.

What is a Firewall Bank Account?

In IT, a firewall is a system that monitors incoming network traffic for nefarious activity. A firewall in construction is literally a wall that inhibits or prevents the spread of a fire.

In our case, a firewall prevents the spread of a financial breach.

A firewall bank account is an account that sits between your primary bank account and any potentially insecure accounts.

Take a look at my financial map:

Paypal is connected to a Capital One 360 account, which is connected to my Ally account. My Ally Bank account is my main account, the Capital One 360 account is my firewall bank account.

(the arrows indicate who can initiate a transfer, so my Ally account can transfer to and from Capital One 360 but my Capital One 360 can't initiate anything with my Ally account)

Specifically, it goes to a checking account at Capital One 360, a checking account with just $1.

My Capital One 360 account is my firewall.

If someone gets access to my Paypal account, it can only transfer funds from a Capital One 360 account. That account only has a dollar so any amount greater than that will bounce.

Why Capital One 360? You can use anything but I use them because it takes only a few minutes to open (and close) sub-accounts with their own account number and has a minimum of $1. It's a feature that first started with ING Direct and I've never felt a need to change. You can use any account as a firewall though.

I Keep My Spoke Accounts Ignorant

If my Ally Bank account is the hub, the other bank accounts (like Capital One 360) are spokes.

My Ally Bank account can initiate transfers to and from my spoke accounts, but my spoke accounts can't. They don't even know about the Ally account.

For example, if you were to get login access to our Bank of America account, you would not be able to transfer money from to or from another account. It has no idea we have accounts anywhere else and that's by design.

Ignorance is bliss!

How to Set This Up Yourself

You can do this as part of drawing your financial map. As you log into each of your accounts, keep track of who can initiate activity and in which direction. Then start deleting the things you don't want and adding the things you do.

You will want:

While you're at it, close any secondary bank account that doesn't serve a purpose and set up a secure email address for the account.

(by the way, this works with any account you want outisde your “firewall,” including these great alternatives to PayPal)

Simplifying your financial life is very liberating.