Is it Safe to Use PayPal or is Credit Card Better?

PayPal has grown significantly in recent years. It now has around 390 million active account users all over the globe. PayPal's function is to allow you to safely send or receive money and it has been doing this since 1998 when it became popular and convenient for people to make purchases on eBay.

People felt more comfortable using PayPal and not a credit card or check for legitimate safety reasons. Now perhaps more so as you can even play great games on a mobile casino.

But is it true? Is PayPal really safe? It may be safe, but for reasons that are not immediately obvious. The fact that PayPal is safe could well be due to basic precautions that you, as the customer, need to take.

Some key points

• PayPal creates a safe place for transactions between buyers and sellers.
• It is also in the interest of credit card companies to ensure that transactions are safe - therefore users are not held responsible for fraudulent purchases over a particular sum.
• There are a number of security actions that you are expected to perform in order to keep your money safe whether you are using PayPal or a credit card.

PayPal's offerings

Even today most purchases made on eBay are via PayPal. And as of August 2019, it was fifth in line as the preferred method of payment with regard to online retailers. The most used was Visa, then Mastercard, American Express and Discover.

• PayPal also offers other ways for people to send and receive money.
• PayPal app allows contactless payments at real physical retail stores.
• Venmo mobile app - mainly for person-to-person money transfers and daily transactions.
• Xoom - a person-to-person payment app that enables users to perform global electronic money transfers.
• PayPal has a Cash Card, a MasterCard debit card that can be used online and in stores.
• There is a PayPal credit card - two cards from Synchrony Bank. A line of credit by way of Synchrony is also offered.
• From 2020 PayPal also began to let its users buy, hold, sell and check out with using cryptocurrencies.

All of the above are designed to be a safe and secure way of transferring money.

So how secure is PayPal?

PayPal transactions are transmitted with end-to end encryption so that hackers are not able to access private data as it transfers from buyer to seller. Even the recipient doesn't get to see your financial data.

There is also a possibility for users to activate a second authorization element making transactions even more secure.

Businesses are recommended by PayPal to do the following in order to be more secure:

• Check transactions daily
• Limit amounts for purchases
• Use the verifying system to verify the billing address
• Make it necessary for the buyer to enter their card's CVV number
• Make it a requirement for users to have strong passwords
• Make sure the operating system and software are regularly updated

Ultimately, PayPal is safe but hackers are looking to take advantage of weaknesses in the user's purchasing activity.

Security measures taken by PayPal

PayPal takes other measures to try to avoid fraudulent activities often associated with e-commerce.

• PayPal has a Purchase Protection policy which means you are reimbursed if what you receive does not match the purchase description. Most purchases are covered by this.
• You will be refunded by PayPal if your purchase doesn't arrive.
• If a purchase is made on your account without your authority, you will not be liable as long as you report it withi 60 days.

The measures used by PayPal are at the top of the industry standard for electronic transactions. In fact, PayPal reward hackers if they find weaknesses in its procedures. Dean Turner who is director of security intelligence at PayPal says "If you care about the produce and you care about your customers, you care about your customers' security - this is what you have to do."

What about safety and Credit Cards?

The credit card companies have not been so positive in taking on some of the security measures that PayPal employs. For instance, they do not reward hackers for finding their security weak spots.

Credit card fraud basically means that a card was either stolen and used by someone else or the information was stolen and used, probably online quickly before the person is aware of the theft.

Credit card companies do have an incentive to prevent this as you, as a card holder, have a limited liability of up to $50. However, for the card holder, theft is very inconvenient and could negatively affect your credit rating.

Security measures and credit cards

Like PayPal most credit card companies have invested in the best security technology.

One big change has been in "card present" anti-fraud technology. There has been a changeover to a card that has a chip inserted into a reader, instead of a magnetic stripe that gets swiped. The microchip sends encrypted data, so it is much harder to steal the information. EMV technology has improved the safety of credit cards being used in a store and prevents data being stolen in the process of the transaction. It is still up to the credit card holder to take security precautions for online purchasing.

The user, whether using PayPal or Credit card needs to take responsibility - a few safety tips:

Credit card use:

• Destroy any cards that do not have a microchip. And avoid purchasing anywhere if they require you to swipe your card.
• Withdraw cash only from bank owned ATM's.
• Purchase gas inside the station. It is easy for gas pumps to have been tampered and fitted with a skimmer which will steal data as the card is used.

Online purchasing with a credit card or using PayPal

• Make purchase only on secure sites, those that have a url - starts with "https".
• Never use public Wi-fi in cafes or airports. Instead use a virtual private network -VPN.
• Never store your credit card details online, perhaps where you purchase regularly. Type it in each time you make a purchase.
• Don't click on links you receive offering you some great deal. These are likely phishing attacks.
• You should frequently change your passwords on your PayPal account and also credit card accounts. Avoid any personal details in your passwords that are too obvious.

In summary

When deciding whether to use PayPal or credit card it may come down to convenience, a particular feature offered or the interest rate charged by either. Whatever your decision, as we have seen, some of the responsibility for safety lies with you.