Overview

Buyers can transfer money to vendors in US dollars, Euros or pounds sterling. Buyers and vendors can also transfer money to and from their bank accounts in other currencies. You can keep separate accounts in Canadian and US dollars. People are using PayPal to speculate in currency exchange fluctuations, or to transfer money out of the sinking dollar into other more stable currencies.

An authorisation is permission for a delayed payment. So for example, when you order something not in stock, you may give the vendor an authorisation to take money out of your PayPal account in future, when he actually ships the product. He may put a hold on your account for the amount to ensure you have that much money when the time comes.

Fees

Advantages

• The big advantage of PayPal is you divulge only your email address to the company your are paying. With a credit card, you must give them your credit card and expiration date. They can use that to make further unauthorised charges to your account, or sell the number on the black market. With PayPal the person you are paying cannot take further money or change the amount.
• With PayPal you can put money in escrow with an authorisation. This proves to the e vendor you have the money, but does not let him withdraw it until he has delivered the goods.
• With PayPal you have access to neutral arbitration over a disputed payment, e.g. when you paid but goods never arrived. Similar services from credit card companies are highly biased toward the vendors.
• A fraudster cannot steal more than the contents of your PayPal account. With a credit card, he can rack up charges often past the spending limit. PayPal is much more secure than a credit card. With a credit card, all a fraudster needs is your credit card number and the expiry date (something written on the card in plain text). With PayPal a fraudster needs to know your email address and your PayPal password. You never reveal your PayPal password to anyone, and ideally never write it down or store it in your computer unencrypted where a hacker might find it.
• You can monitor the state of your PayPal account online. Further PayPal sends you emails any time the balance changes. If a fraud ever happened, you would know about it right away.

Disadvantages

• When you load up your PayPal account from your bank account they take the money out of the bank then sit on it for 14+ days before putting it in your PayPal account. They advertise 3-4 days. It is bad enough they pay no interest on your account without sitting on your deposits for two weeks without interest and without giving you access to it.
• Since it takes two weeks plus to load your PayPal account up from your bank account, it means you need to maintain a fairly hefty balance in your PayPal account that earns no interest.
• PayPal fees are pretty steep when you consider how cheap it is for them to process the transaction and that they get to keep your balance in a bank somewhere earning interest for them, and none for you. Consider that travellers’ cheques, which require even more processing, are free. PayPal could be free and still generate hefty profits.
• PayPal is a somewhat unethical company. For example, they ask you to participate in what appears to be annoymous surveys, but encode your identify in the URL.

Phishing: Making Sure Emails Are Sent From PayPal

1. If you receive an email and are unsure whether it is from PayPal, open a new web browser (e.g., Internet Explorer or Netscape) and type in the following: https://www.paypal.com/. Don’t click on any link in an email which seems suspicious to you.
2. Some spoof websites will send emails that pretend to come from PayPal to entice you to log in at the spoof URL. Be extremely cautious of emails that direct you to a website that asks for sensitive information.
3. Stay safe; don’t respond to emails asking for any of the following:
   • Your password and email address combination
   • Credit card numbers
   • Bank account numbers
   • Social security numbers
   • Drivers license number
   • First and Last Names
4. If you have surrendered financial or password information to a suspicious email or website, promptly report this to the issuing institution as well as change your password and secret answers on your PayPal account. This can be completed in the Profile section of your account.
5. PayPal will never send you an email with the greeting "Dear PayPal User" or "Dear PayPal Member". Emails initiated by PayPal will address you by your first and last name, or the business name associated with your PayPal account.
6. For your security, PayPal will never ask you to re-enter your full bank account, credit, or debit card number without providing you at least the last two digits of the number. These digits let you know that PayPal already knows the full number and are asking you for the rest of it. Beware of any website or email asking for these numbers for "verification" that does not prove that it knows the number by providing at least the last two digits

Making Sure That Websites are Hosted by PayPal

1. When using the PayPal service, always ensure that the URL address listed at the top of the browser is https://www.paypal.com/. The ’s’ ensures that the website is secure. Even if the URL contains the word 'PayPal', it may not be a PayPal webpage.
2. Look for the 'lock' symbol  that appears in the lower right hand corner of the Internet Explorer browser. This symbol indicates that it is a secure site.
3. Do not download attachments, software updates, or any application to your computer via a link you received in an email. PayPal will not ask you to download anything for your account to work.

Passwords

1. Use a unique password for the PayPal account and change it every 30-60 days.
2. The password should be one that is not used on any other site, service, or login.
3. The password should be unguessable. Use my password generator to create you a suitable one:

Setting Up PayPal On Your Own Website

• create a Buy Now button. Use the encrypted form so spam harvesters will not see your email address embedded in the generated HTML.
• create a Please Donate button.
• accept PayPal logo. Sometimes the page fails to show any logos or HTML. Try a different browser.
• accept credit cards via PayPal logo. Sometimes the page fails to show any logos or HTML. Try a different browser.
• other PayPal logos. Sometimes the page fails to show any logos or HTML. Try a different browser.