Is a credit card safe compared to PayPal? PayPal’s only job could be said to be enabling safe transactions. The job is constantly growing, and the challenges are never-ending. Several products are offered by PayPal, which now has an estimated 392 million active accounts worldwide. Each one is designed to make it safe to send money electronically or in person. Since 1998, PayPal has been a popular way to pay for purchases on eBay.If it wasn’t as safe or safer to use than a credit card, cash, or check, PayPal would have been long gone. Many still ask if PayPal is safe. Is that the right question?PayPal has a range of security measures to keep other people’s paws off your money. However, the weapons are most effective when you, the PayPal customer, take some basic precautions.
KEY TAKEAWAYS
- PayPal’s business model is based on enabling safe transactions between buyers and sellers.
- Credit card issuers have a good incentive to make transactions safe, too. You’re not responsible for fraudulent purchases beyond a maximum of $50.
- There are basic security measures that you can take to guard against fraud, whether using PayPal or a credit card.
What PayPal Offers
To this day, eBay purchases are typically made using PayPal.As of August 2019, it is the fifth most-used payment method at all online retailers, after Visa, Mastercard, American Express, and Discover.
It has a number of other products that enable its customers to send or receive money. Some of them are:
- The PayPal mobile app enables contactless payments at real-world retailers.
- The Venmo mobile app is primarily used for person-to-person money transfers and routine day-to-day transactions.
- Xoom is a person-to-person payment app that is used to make electronic money transfers globally.
- The PayPal Cash Card is a MasterCard debit card for use online or in-store.
- A PayPal credit card, where PayPal offers two cards issued by Synchrony Bank. It also offers a line of credit via Synchrony.
- PayPal entered the cryptocurrency arena in 2020, allowing its users to buy, hold, sell and check out cryptocurrencies.
Every one of these products is designed with the sole purpose of transferring money securely.
How Safe Is PayPal?
All PayPal transaction data is sent with end-to-end encryption designed to thwart any hacker seeking to capture private information as it moves from buyer to seller. Your financial information isn’t revealed to the recipient, meaning it’s kept private. A second authorization factor can be employed by PayPal app users to make each transaction safer. You’ll get a temporary security code by text message that you enter in addition to your password after enabling the SecurityKey feature. Here are six recommendations from PayPal for businesses to prevent fraud:
- Keep track of transactions and reconcile accounts daily
- Set purchase amount limits
- Verify billing addresses using the address verification system
- Make sure the buyer has to enter the card’s card verification value (CVV)
- Require users to set strong passwords
- Ensure the operating system and business software are up to date
PayPal’s security measures
PayPal has other policies that are designed to address some of the fraudulent activities and miscellaneous shenanigans that evolved with e-commerce:
If a product purchased online using PayPal arrives and is “significantly different from its description,” the PayPal Purchase Protection policy ensures that users are reimbursed in full, including shipping costs. If you order a wedding gown and get a dishrag, you’re covered, but it doesn’t cover absolutely all purchases. You could report an order that doesn’t arrive and get a refund if it was paid using PayPal.You’re not liable for an unauthorized purchase on your account if it is reported within 60 days.
PayPal vs. credit cards: Which is safer?
PayPal’s procedures are among the most secure in the electronic transaction industry. Not every bank that issues a credit card meets the industry standard. Hackers are paid by PayPal if they find vulnerabilities in its systems, which is referred to as “ethical hacking” in the industry.” If you care about the product [and] you care about your customers, you care about your customers’ security—this is what you have to do,” said Dean Turner, director of security intelligence at PayPal.
How Safe Are Credit Cards?
Some of the cybersecurity practices that PayPal employs have been known to be resistant to credit card companies. For example, the banking industry does not pay hackers to alert them to security flaws, according to the Financial Services Roundtable.
The basics of credit card fraud
There are two broad categories of fraud in the world of consumer credit fraud protection: “card present” and “card not present.”A physical card was stolen and used by a human being. This means the information was stolen and used. Theft can be detected quickly if the sentence is rewritten correctly. Both types of fraud are most effectively prevented by the companies that issue credit cards. U.S. law limits your liability to $50, regardless of how much is charged. There are some serious downsides for the customer in credit card security breaches, including some serious inconvenience and possible credit rating damage.
Credit card security measures
Other industry leaders, such as PayPal, have adopted leading security technologies, and most credit card companies have followed suit by investing heavily in these technologies. Though not every credit card company is the same, some are more advanced than others. The biggest change in “card present” anti-fraud technology is the switchover to a card that uses a chip that is inserted into a reader to make a transaction, rather than a magnetic stripe that is swiped along the side of the reader. The microchip in the card sends encrypted data, making it more difficult for thieves to steal information. The improved technology called EMV has made it safer to use a credit card in a store by preventing the theft of your information as it is transmitted to complete the transaction. The user is responsible for taking their own security precautions, particularly when making online purchases.
PayPal and credit card security breaches
Apparent credit card data breaches seem to be occurring more frequently than ever. The fault seems to lie with the retailers who accept credit cards, not with the credit card issuers. Recent years have seen some of the biggest breaches, including Capital One, TJX Companies, and The Home Depot. In these and most other cases, the problem appears to be malware targeted at point-of-sale devices. The retailer is storing credit card information in a way that makes it vulnerable to theft by hackers. However, PayPal’s security protocols have recently been called into question. Certain PayPal security features, such as the one-time pin and two-factor authentication (2FA), were bypassed by ethical hackers. PayPal reportedly brushed off the issues.
Tips for Protecting Yourself
The user, not the issuer, needs to take much responsibility for account security. This is true for companies such as PayPal and American Express, whether they offer virtual accounts or plastic cards.
When using a credit card
A few tips for protecting yourself when using plastic credit cards:
- Cut up any card you still have that doesn’t have a chip. Avoid using it if you come across a reader that requires you to swipe the card because the chip reader is malfunctioning or the store has an out-of-date machine.
- Use only bank-owned ATMs to get cash.
- Pay for gas inside the station, not at the pump. Gas pumps are notoriously easy to outfit with a card skimmer that steals account information as it is used.
When using PayPal or a credit card online
- Make online purchases only on secure sites. These usually have a URL that starts with “HTTP” and displays a symbol of a lock. These signals encrypt the connection between your web browser and the site’s server. This is by no means guaranteed protection, but it closes off one avenue for fraud.
- Don’t use the public Wi-Fi available at coffee shops and airports. Use a virtual private network (VPN) instead.
- Don’t store your credit card information online at your favorite retailers. Type it in every time.
- Beware of phishing attacks. These usually arrive via an email or text message promising you something great if you only click this link.
- Change the passwords on your credit card accounts (and your PayPal account) frequently, and don’t use your name, your kids’ birth dates, or any other too-obvious password.
Who Is PayPal Anyway?
PayPal Holdings Inc. is now a public company listed on the Nasdaq stock exchange.eBay acquired it in 2002, after its first initial public offering.PayPal was growing faster than its parent company at one point. It again became a separate public company after eBay decided to spin it off in 2014.PayPal has acquired several other companies in addition to Xoom. This sentence includes Honey Science Corp., an online couponing site; iZettle, a payments processor; and Braintree, another mobile payment app.
FAQs
Here are some brief answers to a few burning questions about PayPal and credit card security.
Is it safer to use PayPal or a credit card?
PayPal is the most secure. It’s not surprising that it evolved with the web since it has had to keep up with every fraudulent scheme that evolved with it. Its additional features, such as a money-back guarantee if an online purchase differs from its description, give shoppers ease of mind. Credit card companies should put security measures in place as they have spent a great deal of money and time doing so. If you are a victim of purchase fraud, they are only legally responsible for the first $50.Fraudsters are a never-ending battle for any of these companies. Whether it’s a plastic credit card or an electronic app, their customers can help by being careful how they use their accounts.
Is PayPal safe to link to a bank account?
You can use PayPal by linking it to a bank account or credit card, depositing money directly to PayPal, or some combination of all of these. Even when using any of these methods, your private account information is not revealed to the recipient of the money because the transaction is accomplished using encrypted data. Paying directly from your bank account is cheaper. There are no additional fees charged.
Can you get scammed with PayPal?
Scam artists abound online and will accept PayPal or any other form of payment without delivering the goods or anything resembling what you paid for. The PayPal protection program promises to fully reimburse your loss in that case. There are at least two good reasons for this generous policy: PayPal can collect enough information to report the malefactors to the authorities and provide the confidence that its users need to use the PayPal platform.
Is PayPal safe for debit cards?
Same answer as above. When you pay using the debit card option, the information is transmitted only in encrypted form.
Is PayPal safe to receive money?
Yes, and you can transfer it directly to your checking account.
The Bottom Line
You can use PayPal, a credit card, or a PayPal credit card for routine transactions between buyers and sellers, both online and offline. Consider convenience, special features, and interest rates when choosing which account to use. You are responsible for your safety, no matter which you use. It is important to use tough passwords and to change them occasionally. Use online retailers wisely. It’s a good idea to avoid using public Wi-Fi and check your account regularly for unexpected purchases. One of PayPal’s big rivals might be a good alternative for you if you’re not satisfied with PayPal.Some popular digital wallets are Google Pay, Stripe, Payoneer, and Skrill.
