Is PayPal a Safe Payment Processor?

PayPal has been around for about thirteen years, providing its clients with e-commerce solutions as an alternative to checks and money orders. As the Internet grew, sites that offered sales of products and services needed easier ways for customers to pay. PayPal answered the need by providing a service that allowed safe and secure money transfers and payment processing.

The online auction service eBay bought PayPal in 2002. As more than half of eBay's clients were using PayPal, it made good business sense to buy them. Then eBay started to require all of its clients to offer PayPal which angered some sellers, so eBay softened their position. PayPal is the world's leading form of online payment.

PayPal offers security protection for both sellers and buyers. By requiring a registration process for new clients, PayPal is helping to guarantee you are who you say you are. Fraud protection is provided by using a system called CAPTCHA, which makes users enter the numbers out of a blurry picture. This is a helpful form of fraud protection with automated banking.

Another way PayPal helps to protect buyers is with a Buyer Protection Policy. The policy covers a buyer in case they never receive their merchandise or if the items were not as it was described to be. The Seller Protection Policy works in that if a buyer claims unauthorized payments and claims of non-delivery. There are of course exclusions and specific rules to follow, but overall, the policies work as expected.

In 2008, PayPal bought Fraud Sciences, an Israeli company experienced in risk tools for the online environment. This acquisition allowed eBay and PayPal to control their own system of fraud management and accelerated the development of tools to detect online fraud.

PayPal offers a 100% protection guarantee in case there are ever any unauthorized payments out of your account. PayPal sends a confirmation email to you when ever there is a transfer of funds, so if you want to dispute a transfer, PayPal's analysts will get to work immediately on tracking down the truth. In fact, PayPal fraud and security team works round the clock with access to the most advanced technology available to ensure each transaction is secure. Identity theft is a major problem and PayPal is committed to making sure it doesn't happen, but if you encounter a problem you can contact PayPal for assistance anytime of the day or night.

There have been criticisms of PayPal general policies as well as their security policies. One of the main headaches of customers is PayPal's custom of freezing accounts due to "potential fraudulent activity". One of the components of PayPal's decision to freeze an account is when too much money is coming in or going out. For merchant accounts this can cause serious problems.

Countries other than the United States have had issues as well, but the biggest problem with PayPal security seems to be the way they can arbitrarily freeze accounts and take their time clearing up investigations they initiated on their own.

For more information about PayPal and their security policies, check out ecommerceandpoverty.info.