As our generation continues to more frequently use credit cards to pay for most of our transactions, it has become increasingly important to protect our financial and identity security.

Global Payments Inc. (NYSE: GPN) reported March 30 a security breach which could affect 1.5 million credit card users in North America. The criminals who hacked the data system potentially left with “Track 2” information: account numbers and expiration dates. This information was not entirely useful for the hackers, as they did not come away with cardholder names or Social Security numbers.

Global Payments is a payment processor company which serves as an intermediary between retailers and banks, processing transactions for MasterCard (NYSE: MA) and Visa (NYSE:V). When you swipe your card somewhere, your card number and other sensitive financial information is directed to firms such as Global Payments, which then send it to Visa or MasterCard before those firms finally send the information to the bank which issued the card.

Although computer hackers have been and will continue to prey on all financial service companies, these payment processor companies are the most vulnerable aspect of our credit card system. Banks have taken aggressive measures to protect themselves and their clients’ information, but these intermediary companies have remained vulnerable.

As a common countermeasure to these breaches, banks, credit card companies and payment processors such as Global Payments are encouraging credit card users to regularly check their transaction history online for unauthorized payments.

This is something which should be done routinely, not just because the media reports a potential security breach to your credit card provider. If you think you may be a victim of theft you should also inform all three credit bureaus (Equifax, Experian and TransUnion).

Projections show mobile Internet usage will surpass desktop computer Internet usage in the next two years, causing the number of online purchases made with mobile phone applications to jump as well.

This unfortunately gives hackers the upper hand: The small screen sizes allow illegitimate sites to trick viewers more easily than they would when viewed on a desktop computer. Even the touch screen feature of all smart phones poses serious risks for users as they may unknowingly touch a hidden link. Another huge problem is that mobile browsers and their operating systems do not get updated regularly with security fixes in the same way laptop and desktop systems do, leaving mobile phones more vulnerable to malicious online activities.

There are several ways to protect yourself from theft. First, you should try making purchases on desktop computers, not your smartphone. The next time you pay for gas, use an ATM, or any stand-alone kiosk. And whenever possible, pay for goods and services with a credit card, not a debit card. Some hackers can set cameras nearby and record you entering the pin number of your debit card. They are also able to record the information on the magnetic strip of your card. This gives hackers access to your financial information, so they can make withdrawals straight from your bank account.

Though hackers have been increasingly successful stealing personal financial information, we may be on the cusp of a new technology which could potentially make credit cards extinct. This new technology is called Near Field Communication, more commonly referred to as NFC.

This technology looks to take smartphones to an entirely new level. We currently enjoy using smart phones for emailing, texting, playing with countless apps and uploading Facebook photos. NFC seeks to combine all of these smartphone features and our wallets together.

When two NFC-compatible devices are within a few inches of one another, they will wirelessly transfer data. This would mean you can pay your bar tab, rent movies or pay for parking meters and vending machines by simply tapping your smartphone. The proximity of the wireless transfer of data significantly reduces the chances of theft.

To gain a head start on this new industry, credit card companies are partnering with firms such as Verizon (NYSE: VZ), AT&T (NYSE: T), and others to develop NFC-enabled devices.

Currently, smartphones are essential to many individuals’ daily lives. But in the future, smartphones will also contain a person’s life. This technology is expected to replace credit cards, business cards, driver’s licenses, student IDs, fake IDs and even the actual keys to our cars and homes.

Until this technology is fully developed, I would recommend following the steps previously mentioned for protecting credit card usage and limiting online payments on mobile phones.

With an eye to the future, however, I would encourage investors to research tech companies and phone companies such as Verizon as they expand their research and development into NFC technologies.