It's the banks problem, to be frank. If you're in the US, your liability for fraud is capped by law at $50 per card.
Firefox
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Temporary card numbers are awesome. Some CC providers give you one, otherwise you can use a service like privacy.com. You can also pay for things in crypto and keep only a limited amount of crypto in your browser-based wallet or do multi-sig so you have to approve transactions from two different devices. This can help minimize loss from an attack.
I don't think that is encrypted at all. Just like your passwords and cookies, they aren't either.
I simply do not use this feature.
I don't. But even if I did, I wouldn't have much use for it as I use single-use debit cards generated via my bank app or TatraPay (my bank's instant method of QR code payments) if the merchant has that option. I just wish there was a universal method for instant QR code payments. It's pretty convenient.
If you have malware on the machine it could just steal it when you use it the next time.