You’ve probably come across PayPal, one of the leading ways to pay for stuff online and send and receive money.
But how safe is PayPal? Are there risks involved? Is PayPal a legit company or should you be skeptical? This article is here to put your mind at ease.
It’ll also point out that PayPal isn’t the only show in town, especially when it comes to sending money internationally – a company like Wise, specialized in low-cost international exchange, could save you a lot of money.
|📝 Table of contents|
Short answer: yes. PayPal is a secure and well established way to send and receive money, and it’s definitely not a scam.
In terms of safety, the recipient doesn’t even get to see the sender’s bank account number or credit card number, so you actually disclose less financial information than in some other transactions.
There’s also protection for both buyers and sellers, just in case things go wrong¹.
So, PayPal is safe to use – but should you use it? That’s a slightly different question that we’ll get to later on. First of all, let’s run through PayPal security from both the buyer’s and the seller’s perspectives.
If you’re buying something online, you needn’t worry about using PayPal. Secure payment is standard thanks to their encryption technology. The sellers you’re buying from won’t even see all of your financial details, for added peace of mind.
If you have a dispute with your seller or think you’ve been the victim of fraud, you can get in touch with PayPal and they’ll try and fix things for you.²
PayPal is safe to link to your bank account, credit or debit card. And yes, you will have to do that – otherwise you won’t be able to get your money to PayPal in the first place. Once you’re connected, you can relax – sending money through PayPal is safe.
Sometimes PayPal takes extra steps in verifying ID. This might be if you want to keep a balance in PayPal itself, or if you’re running a business using PayPal. In those cases, PayPal could well ask for your social security number.
This is in line with federal regulations, and PayPal will check your information against official records.
So if you need to give PayPal your social security number, it should be safe in that there’s likely a legitimate legal reason for them asking for it.³
Of course, always double- and triple-check you’re dealing with the real PayPal and not a fake version. Don’t give out details like your SSN if you’re in any doubt about that.
PayPal vs credit cards is a common dilemma when you’re shopping online as many retailers accept both as payment methods. One of the reasons it’s a tough choice is that there’s not a lot to choose between them.
Different credit cards offer varying levels of fraud and payment protection, so the answer may come down to what your card provides. PayPal purchase protection has your back if you report the problem within 60 days – although some purchases, like real estate or cars, aren’t covered.²
In truth, the difference in security between your credit card and PayPal may well be minimal, and your decision might simply come down to what feels more convenient.
In order to use PayPal, you’ll need to connect PayPal to some source of funds – your bank account or a credit or debit card. It’s just as safe to use a debit card as it is to use any other method.
There’s not really a lot of difference between connecting PayPal to your bank account and connecting it to your debit card – both will pull money directly from the account. So you might not need to provide PayPal with both sets of details.
According to some, the very best option is to connect PayPal to a credit card – as we’ll explain below.
When shopping online, security is always key, whether you’re using PayPal or another method. Here are a few of the key things you should bear in mind.
Public wifi is more vulnerable to hackers, so it’s best avoided for any sort of financial transaction. If you do have to buy something when you’re out and about, use your mobile data.
Minimizing the number of places you give your financial data to – we’re talking home and work computer, phone, tablet, etc etc – means there’s always less chance of a security breach.
And always make sure you have decent and current antivirus software.
Put more simply: don’t get scammed. If you have any doubt about this, be cautious.
As already mentioned, you can pay PayPal using your bank account or a credit card.
But using a credit card gives you more options in case there’s a dispute with a seller. You can appeal both to PayPal and to your credit card company, thus increasing your chances of a successful claim.
What about if you’re selling stuff online? Is PayPal safe to receive money? Yes, it is – that’s one of the reasons it’s so widely used.
PayPal has a Seller Protection Policy that makes sure that claims and chargebacks aren’t any more than necessary, and – just like with buyers – your financial details are well protected too. There’s also merchant fraud prevention.
So for sellers on eBay, Craigslist, or wherever else, PayPal may well prove to be a safe option.⁴
|Selling internationally with PayPal? Find out how much you’d pay with this PayPal fees calculator.|
When it comes to selling online, here are some key tips to make sure you don’t run into difficulties with PayPal or whatever payment provider.⁵
The best way to avoid a complaint is to make sure your buyer knows exactly what they’re going to get, when, and how. So make sure your product and shipping information is all completely accurate.
Sellers should be on the lookout for scams too. Be ready to step in and investigate anything that looks weird, whether that’s a low trust rating or a partial payment.
Track your packages properly, get insurance, and keep your buyers in the loop. Otherwise, you’re vastly increasing the risk of something going wrong.
PayPal.Me is a product that provides you with a simple link that you can pass on to whoever has to pay you – a friend who owes you for lunch, a client with a bill to pay, or whoever else.⁶
In terms of security, PayPal.Me is just as safe as conventional PayPal is. Via the link, the payer will just see your photo, name, and maybe your location – they won’t see any bank details; all that information is encrypted.⁷
Because PayPal isn’t a bank, it isn’t FDIC insured.⁸ That means that you probably shouldn’t treat it like a bank – leaving a large sum of money in a PayPal account isn’t as secure as leaving it in a bank. There is always risk that PayPal could become insolvent and then you might lose your money – although of course that risk is small.
This doesn’t mean PayPal is unsafe in general. It’s just not the same as a checking or savings account.
All in all, security is one of the reasons for PayPal’s success over the years. It offers security for buyers and sellers alike in processing online payments.
There are also a few measures you can take, like connecting PayPal to your credit card, that offer just a little bit of extra security in the event that things do go wrong with a purchase.
As for the question of whether you should use PayPal or another service – that’s up to you. Especially if you’re buying or selling internationally, do take PayPal’s fees into account as you decide. PayPal exchange rate probably won’t be the mid-market rate – and for sellers, there are quite a few merchant fees to bear in mind too.
Sending or receiving money overseas? Save your money: meet Wise.
Unlike with PayPal, with Wise you won’t have fees on the exchange rate. You know exactly how much you pay - just a small upfront fee - and how much will arrive to the recipient’s bank account in the other country. With no extra costs on top.
Check this page comparing PayPal and Wise prices and find how much exactly you'd spend with both for your transfer.
How to send money internationally:
- Join Wise for free
- Choose the amount and the sending and receiving currencies
- Insert the recipient's details
- Make the payment
If you’re receiving the money, then you just need to provide your bank details to the sender, and no fees will be charged to you. As simple as that.
1.PayPal: purchase protection
2.PayPal: safety and security
3.PayPal: customer identification program
4.Paypal: seller protections
5.PayPal:tips for sellers
7.PayPal FAQ: How secure is PayPal.me?
Sources checked 18 February 2021
This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.
If you've been wondering about how to transfer money from your Apple Cash account to your bank, look no more: we'll show you how to transfer apple cash to bank.
Integrated with Apple Pay, Apple Cash provides a way of sending and receiving money on your Apple devices. In this article, we'll show you what is Apple Cash.
If you want to find out how much time does it take for a Cash App direct deposit to hit, keep reading, we'll tell you the answer & more.
Setting up a Wells Fargo direct deposit is easy - check out this article to see. We'll also answer other questions you may have about this topic.
Setting up Bank of America direct deposit is easy. In this article, we'll show you how to do it in 3 easy steps – and answer all your other questions.
PayPal direct deposit is quite easy to set up. Click here to find out what steps you need to take, how much time does take to go through & more!