PayPal: advantages and disadvantages of the payment service

PayPal as a payment service is indispensable in online retail. We explain the advantages and disadvantages of using PayPal.

The advantages of PayPal

In addition to bank transfer, direct debit or credit card, payment via PayPal is a common method, especially for online transactions. Commercial eBay sellers are even required to offer PayPal. The reason for the wide spread is the quick and uncomplicated payment processing.

• PayPal is easy to use. All you need to pay for purchases online is your email address and password. This will log you into your PayPal account and confirm the payment details.
• Transactions are carried out very quickly. After you initiate a payment, PayPal immediately informs the seller and forwards the amount to him. The dealer can then immediately send the ordered goods.
• PayPal does not share information about bank accounts or credit cards with the payee. The seller does not need this data either, because he also finds the incoming payment in his PayPal account and can transfer it from there to his bank account.
• You can also use your PayPal account to send money to friends, relatives, or anyone else. All you need is the recipient's email address. This must register with PayPal in order to be able to dispose of received amounts.
• PayPal offers a security function called "Buyer Protection". If you do not receive an ordered product or receive it damaged or if the problem cannot be clarified directly with the seller, switch on buyer protection. PayPal then checks the process. If your claim is legal, you will get your money back.
• If you send back a product and have to bear the postage yourself, PayPal will reimburse you the return costs. This applies to 12 return hours per year up to an amount of 25 euros each. You have to activate the service once in your PayPal account.
• PayPal payments for purchases and friend transfers are free of charge as long as they are made in euros. Maintaining the PayPal account is also free of charge for private and business accounts.

The disadvantages of the payment service

• PayPal accounts are often targeted by criminals. Fake emails direct customers to fraudulent websites where they are asked to disclose their personal information or PayPal passwords. Therefore, always be careful when you receive such an email from PayPal and never follow the links it contains. Always call up the PayPal page directly via the browser.
• PayPal stores your data on servers in the USA. According to PayPal's data protection principles, this can also be done at other locations worldwide. It is therefore not clear where exactly your data is and what data protection measures are being taken there.
• PayPal shares data with third parties. This is necessary in order to process transactions or comply with regulations. On the other hand, your data will also be transmitted to other companies for credit checks, for settling disputes and for marketing purposes.
• PayPal requires online retailers to pay fees for payments received.

You can find out how PayPal works in the next post.