PayPal Online Payment System Review
July 21, 2008
Paypal is becoming a more-ingrained part of the Internet. If you’ve ever been worried about security problems using Paypal, keep reading. The service is pretty invaluable, but it’s also had some ups and downs.
What exactly is Paypal: it’s a online payment system allowing payments online without having to deal with money orders, checks, or inputting your credit card on a new site. More and more vendors are incorporating Paypal into shopping carts. For vendors, this is a cheaper and easier system than creating a merchant account for credit card processing. For spenders, it’s easier to have one type of payment system. Paypal users enter in a credit or debit card number and the funds are taken out that card. This is a free service for the majority of users, but people with a very active account, such as top eBay sellers, will need to get a higher-end Premier account to process additional transactions.
Paypal also accepts payments for individuals, rather than businesses. Each user can be paid through an email address – though basic accounts are limited to 5 debit card transaction and $500 per month. Once the funds are uploaded to Paypal, the user has a number of choices. Most commonly, users transfer these funds directly to a bank account. This is free, though a bank could charge for the transfer.
There are some fees associated with Paypal – but these are normally associated with online vendors selling a product, rather than people making purchases. There can be increased fees depending on the country of origin, type of currency, and the amount of money sent. Currently, Paypal has 164 million accounts and operates all over the world in 190 markets.
Problems with Paypal
Paypal is not without its problems, as exemplified by the site, Paypalsucks.com, which is on a crusade against the money transfer company. Their main complaints against Paypal are:
- Limited fraud protection. Unlike credit cards, if someone uses your Paypal account, you could be liable to those charges. However, if the Paypal account is connected to a credit card, you could dispute a purchase directly. In addition, Paypal offers increased anti-fraud and chargeback protection now than when these types of charges were first made.
- Paypal is vulnerable to identity theft, such as phishing scams, in which scammers set up dummy, look-alike sites to get financial information. If you’re the victim of one of these scams, Paypal has limited protection for users.
- It is at Paypal’s discretion to freeze or unload your account if they feel there has been unethical or fraudulent activity. This has happened to people who were entirely innocent, or they were penalized because someone paid them with a stolen credit card, which is entirely out of a person’s control.
This post doesn’t mean to shill for Paypal, but none of these issues appear to be too drastic. Take #2: any web surfer should be well aware of phishing and spam email schemes, so the surfer does bear some responsibility. A couple of years ago there were a lot of spam Paypal emails phishing for info, but these have fallen back a bit recently. A way to avoid #3 is to transfer funds as soon as their received in the account. However, if you’re using those funds to buy things, rather than attaching the Paypal account to a credit or debit card, then you’re going to have to leave the funds standing. The recommendation: attach the Paypal account to a card with some consumer protection.
Finally, a MAJOR caveat to those complaints. The PaypalSucks site links to a Paypal alternative called National Merchant Bancard, so there is something slightly duplicitous about the site itself. That said, the site does raise some issues that you should look out for. Generally, you should feel pretty secure using Paypal. The value in Paypal is that it is actually more secure: instead of plugging in sensitive financial info on an unverified website, you can pay through Paypal and feel more secure about the transaction.
Writer Auditions - Author Henry Brown - Offer Your Feedback
There is no site out there that is perfect, however PayPal comes pretty close. The fact that someone has a site out there bagging on PayPal is funny but sad. They do a really great job and have helped my business make some money.
As a struggling (I mean budding) entrepreneur they offer a great free service (though they charge you for your transactions with people).
I would recommend them to anyone and would shun anyone who was against them. As they would say on Charlie The Unicorn off Youtube
“Shun the non believer”
“Shun”
“Shunnnnnnnnn”
PayPal can be very handy and makes life easier when using Ebay. However, I am not a big fan of the negative issues with PayPal, therefore I try to never have more than a couple of hundred dollars in my PayPal account. I do like the cash back bonus for using the PayPal debit card and the small amount of interest you earn on your cash. Too risky to be a bank replacement or a place to keep lots of money though.
I have heard pretty good reviews about Paypal but is it really safe having an account online with all your information on it? I feel like it would be too public!
Valerie, having info on the Paypal site is secure – as secure as storing your credit card info on Amazon, though you’ve got to do stuff on your end like set up a firewall, anti-virus, anti-spyware, and the like. The main complaint people have about Paypal is that accounts get frozen, seemingly for no reason. This is actually a safety net to ensure that the site is secure by weeding out illegal activity, but innocent people have had their accounts frozen. This is not a rampant problem, however, and all the Paypal scare sites (Paypalsucks, Paypalwarning.com, Aboutpaypal.org) are set up to shill for another online payment provider. Basically, you should feel just fine using Paypal.
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Paypal is great for buyers..and paypal USED to be great for sellers.. someone stole a credit card and purchsed an item from me on ebay and boy did i suffer for that..they froze my account and held $700 from me for 6 months over the whole thing..even though I wasnt the one who stole the account.. so in the meantime i took my losses for that and opened another account and thought all was jolly..was selling my behind off sending everything out then for no reason 1 month after tallying up all the money in the account paypal freezes me again for no reason at all. try to call them and sometimes you get an american whos great and helps you out the other times get some foreign who cant even spell paypal let alone work for it. i hate they only allow you to withdraw $500 a month unless you do this or that…paypal has literally stolen over $2,000 from me, i am out my product i shipped and my money.. i truly hate paypal and it really sucks that they are the only site that works so well with ebay..boy do i wish someone made an alternative to paypal that was just like them without all the freezing like they are the IRS. man i can just imagine how much money they have stolen from there loyal customers..yeah so paypal sucks and any idiot who dosent think so than needs to see the kinda crap they are pulling on sellers these days.