PayPal is an online payment system that allows users to pay for transactions, accept payments when selling items or services and send money to friends and family. PayPal has security features in place, including encryption and purchase protection, to safeguard your money and data.
In general, PayPal is considered a safe way to send money and shop online. No platform is foolproof, but an assessment by cybersecurity risk management company UpGuard gave PayPal an “A” rating for its security practices. Here are the security features in place for customers:
PayPal security key: In addition to a traditional password, customers can set up an optional security key, which is a type of two-factor authentication. That means that every time you log in, you’ll receive a text message to your cell phone with a randomly generated one-time PIN. You’ll only be able to log in if you have both your PayPal password and the one-time PIN. If a fraudster somehow gains access to your password, they’ll still be unable to log in without access to your cellphone.
Email confirmation: Every time you make a purchase or sale, you’ll receive an email from PayPal confirming it. That can help determine if someone has used your account fraudulently. But use caution: Email confirmation is also the basis for a well-documented PayPal phishing scam, in which users receive a fake confirmation email from a PayPal imposter trying to gain access to their account. (More on that in the next section.)
Data encryption: PayPal uses end-to-end encryption to secure your transactions using only secure connections to its internet servers.
Fraud monitoring: PayPal keeps an eye on transactions 24/7 and will alert you if it notices a suspicious login or purchase from your account.
Purchase protection: If you bought an item using PayPal and didn’t receive what you expected—say the item was damaged or used instead of new—you may be able to get a refund from PayPal, including shipping costs. You’ll have to submit the dispute within 180 days of payment to qualify.