Hi,

Ok, I noticed there are some things one cannot live without, one of them: money. And the payment of stuff...

I dont have a visa card yet, nor do I have a paypal account. So, where do I go from here? Actually, a credit card with a max of 100 eur would help a lot (I live in belgium) but does that exist? And how does paypal work? Is it safe. I'd use it with a separate bank account...

So, questions:
- Any paypal users there?
- How does paypal work?
- how save are paypal and visa?
- How does it stack up against visa/mastercard.

Thanks for helping out a newbie who wants to PAY for stuff once in a while. )

Thor

I've used Paypal off and on for many years---no problems.

I suppose and advantage is that you never need a credit card---just deposit money from your checking account. (I don't remember all the options)

PayPal (in Europe at least) is a registered bank, and they provide audited electronic fund transfer between your account (on PayPal) and someone else's. They use their own method to do this, which has the advantage of not requiring your details to be sent to a human being. There is therefore no risk of having your card number stolen, because you don't have one. Generally speaking, your PayPal account can be linked to your real bank account (usually by card, but not always), and money taken from your account when your PayPal balance reaches zero. (This can cause confusion, as if you ever receive a one-off payment to your PayPal account, your bank balance won't reflect your next PayPal payments until the balance gets used up).

With Visa/Mastercard, you are giving your card details to the other person, and taking it on trust that they won't take more money than they claim, and won't ever use their card details a second time. This sounds bad, but you do get two forms of protection: one is that failing to properly secure someone's card details is an offence in most countries, and the other party could go to jail for abusing your trust, and most intelligent people won't risk that. The other is that your bank has an anti-fraud department that will actively monitor all their customer's accounts for suspicious activity.

Generally speaking, payment with PayPal is secure, but you're not protected from the other person running away with your money or providing you with shoddy goods (except for some eBay purchases, which are insured automatically). Payment by card is not secure, particularly when dealing with people you don't know. Either way, the most common problems are goods not being sent or being as described; payment problems are rare but can be devastating.

General common sense applies, and Internet shopping is no better or worse than any other market. The most important thing is to stick to known brands that you trust (Amazon, eBay, any high-street shop you would shop in), and always find out what actions you can take if anything goes wrong before you send the payment.

Hi,

Thanks for this info, guys, that helps me to decide. Getting a card is risky as they (the bad guys) can sip out the whole account...leaving one hanging dry.

Well, this answers my questions in full.

Again: thanks!

Thor

I don't know about Belgium, but in England at least, if your debit card is used fraudulently and you have not been negligent, the bank is liable - meaning they have to reverse the fraudulent transactions, and it's then their job to pursue the fraudster if they want their money back. Giving your card details to a company for paying them would almost never be considered negligent, but having your PIN on a post-it stuck to the card would be.

Yep, same here in Belgium.

Hi,

Well, how about taking it just one level further: by opening a SEPARATE bank account, without any frills (card, below-zero credit and so) and link THAT account to the paypal account.

Just that extra level of security?

Thor

The credit card (Visa anyways) has more advantages too. I have chosen not to get one (yet at least) because I don't really need one, but have of course found out what it's all about (I imagine it works the same way in other countries as well). In addition to the seller and buyer (you) there's a third party involved (who grants you the credit if you choose to buy that way). They're a sort of bumper between you and the seller; for example if you get "cheated on" and after paying you never receive the thing you bought, they make it up to you. If you buy something (on credit) and it breaks up right after you get it, they make (with certain conditions I guess) that up to you too. If you use a "Verified by Visa", which you would if you paid with it, you're pretty much guaranteed that the other end is reliable (or if not, it's not you who suffers). I'm not sure if PayPal offers services of this kind, but Visa (and probably other credit cards too) does. Of course there are extra costs to be paid, however small, like the fee for having the card, or in some cases an extra percentage added to the price when taking out money or paying (abroad). Last time I did a calculation I found these pretty reasonable however when compared to the other options available; a non-credit card here would have cost equally much.

I also imagine Visa works in more places than PayPal does (or then it's just the sites I visit).

My usual internet shoppings either come with a bill or are paid when I fetch the package from the deliver, but some day I'm probably going to get either PayPal account or Visa/alike or both. Interesting to hear other comments from these as well..

The above is correct. In the UK, if you pay for a purchase over £100 with a credit card, the credit card provider is equally liable (as the seller) if things go wrong. This most often comes into play if you pay a company that goes bust before providing your goods - you have little hope of getting your money back from the administrators, but you can claim it back from the credit card provider. I expect some other countries have similar laws.

Note that Visa is not necessarily a credit card - Visa debit cards are common also. It makes no difference to the seller which you use, they're processed in exactly the same way.

I use PayPal when there's no alternative, and I don't have a "PayPal balance": they just put it on my credit card.

I keep a Visa credit card (from Barclays) exclusively for the internet, and keep the credit limit low. I was nearly the victim of fraud once: I think the card number was lifted from a small bookshop I dealt with. The bank suspected fraud at once when someone tried to use the card number to buy the sort of stuff I don't buy at a business I've never used. They told the firm to hold the delivery and phoned me to ask if the transaction was genuine, so the fraudster never made a penny.

I couldn't see how the fraud would work, as the goods would have to be delivered to my address. The bank told me that some-one would have checked that I was out and then sat in a car outside. When the delivery van came, they'd jump out the car and say "Just in time! Is that the plasma TV for McCann?" and hope the van-driver was stupid enough to hand it over. As the man at the bank said, times have got harder for crooks since shops adopted chip and pin!

I'd definitely agree with the advantages of the credit card (Visa or whoever) over the debit card or Paypal, as it (a) avoids giving out your bank account information or providing a direct line to your account (b) provides some fraud protection or dispute mediation. There are ways around (a) e.g. using a separate account with limited funds, but no real replacement for (b).

They both have their uses.
- Credit card users can't accept payments because they haven't got the processing facilities to do so. With a paypal account, payments can go in both directions (a certain fee may apply to receipts but sending money is free); all that is needed is a browser.
- Paypal offers some measure of security as it doesn't expose your bank account / credit card details to the seller but processes all payments itself. This is desirable whenever you are dealing with individuals you do not know all that much about. Of course, if sellers abuse you credit card, you can submit a claim to your credit card company and you are very likely to get your money back. But why go to that trouble if you can avoid it altogether?
- Credit cards are more universally accepted. Many online shops do not accept paypal. Neither is a paypal account any good if you need to pay in a physical shop or over the phone.
- Credit card paymens are less of a hassle. You simply submit your details or, if your data have been saved by a company, you click a "pay now" button.
- On the whole, credit cards offer better protection against fraud. If you disagree with a transaction, you can demand a chargeback (though the company may stipulate that the first 100 euros or so come out of your own pocket - I imagine this is meant to dissuade buyers from pressing for dubious chargebacks). The credit card system is also better monitored. Over the ten years or so I have owned a credit card, it has been canceled and replaced three times by my bank because they had some evidence that the details had ended up in the wrong hands. In none of these cases, my card was actually abused. Credit card companies prefer canceling too soon rather than too late. The paypal system, on the contrary, is a lot harder to monitor. When fraudulent attempts comes to light, it is usually too late and paypal may waver all responsibility.

I use both, actually. Credit card mostly but paypal whenever I do not know the other end or I need to accept a payment. My paypal account is linked to my credit card so the paypal balance is processed once every month, when I pay my credit card balance.

Either that, or the fraudsters OWN the business that the payment is being made to, and thus get the money and never ship anything. They'd probably get shut down quickly, but not quickly enough to stop them getting a tidy sum.

Or they own the courier company, and steal the goods that way.

I will say this: PayPal, Inc. is doing a lot of things very right. One of the very nice things about their service (for a debit card that I own) is that you get an e-mail within minutes (if not seconds) of the completion of every transaction.

Another nice feature ... and this might sound peculiar ... is that, if for some reason you don't have sufficient funds in the account, PayPal will decline the transaction. (Unfortunately, right now many American banks will accept the transaction, just so that they can slap you with fees.) Very handy: you also get an immediate email to the effect that the transaction was declined.

I think that you do need to have "a conventional credit card" for some things, like renting a car here in the States. But you only need it for a few occasional things. Most of the time the best way to go is to "pay cash, electronically." PayPal is an extremely good provider of that service.

I have an account with them with an intentionally small balance. (If you manage to steal the card, which is unlikely, you can't steal much, even worst-case, before the card drops dead, because there is never a lot of money there to steal.)

Two thumbs up for PayPal. "It is a pleasure to do business with them."

The above behaviour is rather different to my setup. When I make a payment using Paypal, Paypal charge my debit card for the amount pretty much immediately. I don't have to 'manually' load my Paypal account. My guess is it's either configurable, or a difference between different countries.

I'm pretty sure that with Paypal the payment can only happen if (apparently) both parties agree to the exact amount to be transferred. Unlike with giving out your card details, when anyone in possession of them can then charge any amount to the card. That means with Paypal, the only way for someone to steal your money is if they compromise your Paypal account (either by hacking your own computer, or Paypal's servers).