Is PayPal safe?

Bobby is trying to buy a gift online, and isn’t sure whether PayPal, the only payment option offered, is safe. We explain the service and whether it’s safe to use.

Q. Bobby 

I want to buy a gift for my wife’s birthday and I’ve found something that is perfect for her, but the online store will only accept PayPal. I’ve tried contacting them to arrange an alternative payment method but they will not make any exceptions. Is PayPal safe to use? 

A. Hi Bobby, to answer your question simply, PayPal is relatively safe to use. 

All forms of online shopping incur some risk, but PayPal is currently one of the safest payment methods available, especially for buyers. According to the website, PayPal’s loss rate is ‘significantly lower than the industry average’. The service also processes more than 9 million payments every day.

One of the reasons PayPal is safe for buyers is that rather than providing your credit card details to every online store with which you shop, you can supply it once to PayPal, and not have to worry about the security and reliability of each individual website from which you purchase.

One drawback of this is that the PayPal website itself becomes a very large target for hackers; however, the website also has a lot at stake and a security breach would be devastating for its business. For this reason, Paypal uses state-of-the-art encryption and security.

The PayPal website states:

“PayPal automatically encrypts your confidential information in transit from your computer to ours using the Secure Sockets Layer protocol (SSL) with an encryption key length of 128-bits (the highest level commercially available). Before you even register or log in to the PayPal site, our server checks that you’re using an approved browser – one that uses SSL 3.0 or higher.

Once your information reaches the PayPal site, it resides on a server that is heavily guarded both physically and electronically. PayPal servers sit behind an electronic firewall and are not directly connected to the internet, so your private information is available only to authorized computers.” 

I have been using PayPal for online shopping for years, and the only problems I’ve ever encountered arose from the 45-day time limit to dispute a transaction.

This rule meant that no matter what the situation, if you hadn’t reported a transaction within 45-days from when you sent the money, you could do nothing to get your money back. This caused a lot of problems due to international shipping times; however, as of November 2014, this time period is now 180 days, leaving ample time for Australian buyers to dispute a transaction if they wish. 

Caution is always advisable when money is concerned, but using PayPal seems to be one of the safer options available for online shopping. 

Read more on the PayPal website.

Related articles:
Tips for safer online shopping
How to get free shipping
The pros and cons of PayPal

YourLifeChoices Writers
YourLifeChoices Writers
YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.
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