PayPal vs Credit Cards

Digital payments have taken a turn and evolved significantly over decades. These online payment methods offer consumers and businesses different ways to complete transactions securely. Among popular methods are PayPal and credit cards; both are widely used for online and in-store purchases. Understand how PayPal works, its security features, and how it differs from credit cards.

PayPal is a digital wallet that allows users to send and receive money electronically. It works like an intermediary between the payer and the payee, providing a secure way to complete transactions without directly sharing their financial information.

Before you begin using PayPal, you will need to register and create an account with the platform. Here is what you will need to do:

1. Visit the official PayPal website (https://www.paypal.com)

2. Create an account using your email address

3. Once you have created the account, you can link your preferred payment method, such as a debit card, credit card, or bank account

4. You can now send, receive, and make payments 

PayPal simplifies transactions by offering a secure and convenient payment gateway to send, receive, and convert money globally.

Purchases Online

When you make a purchase from an online retailer, PayPal acts as a mediator that helps process the payment securely.

Receiving Money

A business or freelancer can accept payments made via PayPal from customers and clients across the world.

Sending Money

Users can send money directly to another PayPal account either by entering the recipient's email or phone number.

Currency Exchange

PayPal allows transactions in different currencies with the help of its currency exchange service at the prescribed exchange rate.

PayPal is known for offering several protection features for both buyers and sellers alike.

Buyer Protection:

Refunds for Unauthorised Transactions

In case of any unauthorised transactions, once they have been reported, PayPal will investigate the transaction and may refund the amount in full.

Refund

If the product that you have purchased has not been delivered or differs significantly from the product description, then you can apply for a full refund.

Dispute Resolution

PayPal offers a dispute resolution centre designed to resolve and settle any conflicts between buyers and sellers.

Seller Protection:

Fraud Prevention

PayPal monitors transactions and the buyer's payment behaviour for any signs of fraud, which helps reduce the risk for sellers.

Chargeback Assistance

In case a buyer disputes a transaction, PayPal will review the case and may cover the cost of the chargeback if the seller meets the eligibility criteria.

Shipping Protection

If a seller ships a product with an authentic tracking number and the buyer claims that they haven’t received it, PayPal may protect the seller from losses.

Encryption and Other Security Measures

End-to-End Encryption

PayPal uses end-to-end encryption to protect payment details and ensure that there is no breach of sensitive data.

Two-factor Authentication

PayPal users can enable two-factor authentication (2FA) for added security protection.

AI-based Fraud Detection

PayPal has deployed machine learning to analyse user behaviour so that it can detect any suspicious or fraudulent activities.

Credit cards are known to come with built-in safety measures designed to protect users from instances of fraud and theft.

Fraud Protection:

Zero-liability Policy

Credit card issuers that follow this policy do not hold cardholders responsible for any fraudulent transactions.

EMV Chip Technology

The embedded chip within a credit card makes it difficult to clone the details of a card.

Virtual Card Number

Some credit card issuers may even offer a temporary virtual card number that can be used for safer online shopping.

Dispute Resolution:

Credit Card Chargeback Rights

In case a cardholder receives defective goods, is overcharged, or becomes a victim of fraud, they can apply for a chargeback.

Purchase Protection

Some credit card issuers may even offer purchase protection and extended warranties on high-value purchases that you make.

Authentication and Monitoring

OTP Verification

Many online transactions require the cardholder to submit a One-Time Password (OTP), which is sent to the user's registered mobile number.

Biometric Security

Some issuers may even offer biometric security measures, such as fingerprint or facial recognition authentication, for a secure transaction.

Choosing between PayPal and credit cards depends on your financial needs and several other factors. Here is a difference between credit cards and PayPal to help you understand: