PayPal Which? report on BBC News

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BBC are running a story on news broadcasts regarding a Which? report on PayPal claiming, although consumers are fully covered for purchases on eBay, when buying off eBay you’re purchase is only protected if you pay by credit card.

Martyn Saville from Which? said if you’re buying outside of eBay your protection is inadequate “we think”. The broadcast explained that if you pay for a purchase using a credit card you’re full covered for claims between £100 and £30,000. Items purchased on eBay are fully protected, however if you make payments off eBay using PayPal “recovery of your claim is not guaranteed”. When purchasing items such as airline flight tickets or non-tangible items like downloadable music there is no cover with PayPal.

Carl-Olav Scheible, head of PayPal explained that PayPal does have benefits over and above credit cards and many buyers are concerned about identity theft – PayPal protects them by keeping their personal details and bank/card details hidden from suppliers. Convenience and security are the reasons he gave for people using PayPal.

I have to say I tend to side with PayPal, it’s very rare that I’ve not received goods, or received them not as described… but I am lazy! If I get the choice to pay by logging into PayPal, rather than fill out address, email, card, telephone details etc, I’ll always choose the easy option.

22 Responses

  1. I’d call this one a draw. PayPal does have many advantages. However, by using your credit card via PayPal, you do lose the s75 protection you would have using it directly and that is something that very few people seem to understand and something that PayPal have (unsurprisingly) not gone out of their way to highlight.

  2. What details are hidden from the supplier by using PayPal, which are not hidden when paying by credit card (online)?.

  3. #2 you are not putting your CC details into a potentially dangerous website, although most use a 3rd party for CC processing, some use an in house type thing and this can just be attatched to a DB to store CC details

  4. One thing that wasn’t highlighted in the report is that credit cards only cover you from £100 upwards whereas PayPal will cover you from £0.00 upwards.

    For many people the vast majority of purchases are under £100 and then PayPal starts to look much better.

  5. the joke is a I dare say, most of us, have at one time or another, gave our
    credit card to a waiter in a restaurant without thinking,
    to take away and process ,
    they could then clone them in an instant. or copy what ever details they want,
    yet mention internet and eveyone goes paranoid ,and adopts secret service standard security

  6. It would never occur to me to use Paypal for anthing other than ebay purchases. If I can pay by credit card I do. Maybe it’s just my dislike/distrust of Paypal.

  7. #3 I thought the database type set up was no longer allowed in the UK (collecting numbers and manually processing them, through a terminal). The level of integration may be different but isn’t the actual processing of the card number always handled by a third party (payment gateway)?

    Many credit cards offer additional benefits like loss/theft cover. It is also fairly straight forward to get you money back if your card is frauduantly used. Not sure what the cover is like if your PayPal account gets compromised.

  8. Actually if PayPal is an option along with standard credit card on a site, I will usually opt for PayPal these days (most purchases are likely to be under £100).

    That’s partly because of the laziness factor, but also after the hassle of having my only credit card cancelled and re-issued earlier this year after it had been ‘compromised’ by a merchant (fortunately no actual fraud). The credit card company wouldn’t say which merchant, I strongly suspect it was Cotton Traders.

  9. There is the added benefit of using PayPal for ID theft purposes that no one has mentioned… when you fill in your details on a website if you do as I frequently do and have my purchase delivered to work you have to fill out address details twice when paying by card – once for the delivery address and a 2nd time for the card registered address. When paying via PayPal there’s nowt to fill out (my work address is saved as an alternative) and the vendor never actually gets or even knows that my card registered address is different.

  10. #9 not many websites that I know of where you get the opportunity to use PayPal before giving your address details or logging in (unlike using google checkout). Yes it’s possible to integrate PayPal that way though.

    The main reasons I don’t like PayPal though are the constant glitches (the ongoing “Don’t forget to claim your money” is a prime example), the extremely poor customer service, the arbitrary “holds” on payment & dispute resolution + that it won’t allow me to use a card if I have a balance, which I like to do so as to keep my accounts neat (not for security reasons :grin:) .

  11. #11 – I think you’re confusing between PayPal Standard Web Payments and PayPal Express

    With the former, the buyer inputs their delivery address , which could be the same as the address registered on PayPal, but if it’s even one character different from the registered address on PayPal (think of the difference between Avenue / Ave / Av.) then neither the Buyer nor the Seller is covered under PayPal protection policies.

    With PayPal Express, the registered address at PayPal is provided to the Merchant as the “must do” shipping address, even if the buyer want shipping to a different address (e.g. gift).

    There is also a major User Agreement difference with Express – you have to show the logo on the site home page, store home page (if it’s a sub site of the main site), and the Express Checkout button must appear as the payment option BEFORE entering the standard checkout flow where the buyer would normally be offered a selection of payment options – if the buyer then declines Express, it cannot be offered on the payment choices page (must you Standard payments instead) – however, just try integrating both Standard and Express on the same cart system and you’re guaranteed a broken site that needs a full reinstall – been there, done that, got the caffiene addiction trying to fix it.


  12. Last time I used Paypal to buy something on ebay, it all went completely pear-shaped. Unusually I didn’t have enough cash in my Paypal account, as I had just withdrawn it all to my bank account, and then decided to buy something – silly me. The debit card I used was then “declined by the card issuer” (even though they claimed to know nothing about the transaction and suggeted I phone Paypal) so they “removed the card” from my Paypal account – but they removed all the bank details as well, and I then had to put it all back as it is the bank account that I use to withdraw money from Paypal. In the end the purchase was put onto my credit card – even though by then I had enough money in my account. I just get fed up with it all.

  13. Would I trust paypal?

    No way!

    I did a chargeback for £351 against paypal for non delivery through my bank in September which I won.

    I just received an email from paypal an hour ago saying that the chargeback had been refused as the buyer had supplied tracking details.

    Paypal have frozen my account and said that they want this £351 back.

    Called paypal and requested the tracking number.

    Whilst paypal were on the phone I called the Royal mail on speaker phone so that paypal could hear.
    The Royal Mail said that the item was delivered in Belfast and NOT London.

    So now my paypal account is frozen even though the person from paypal agreed that the tracking details were false.

    So if I have the option of using paypal or a merchants processing account I will always go with the merchants processing.

    I know that my story is not an uncommon story with paypal!

  14. PayPal is NOT a bank and therefore does NOT have to follow any of the rules and regulations required by a bank. So… it doesn’t.

    It’s going to be VERY interesting to see what happens with the new PayPal top up Visa card, as one of the main problems with PayPal is you lose the Credit Card protection you would have got if you paid directly.

    So, a Credit card without credit card protection… people will buy things, get ripped off, and have nowhere to go…Yikes!

  15. #14 Paypal Europe IS a bank and is regulated by the by the Luxembourg bank authority, the Commission de Surveillance du Secteur Financier.

  16. I am a supplier of a service and felt uneasy today when I clicked the transfer button to transfer funds (around £1000) into my bank account. It wanted me to check a box something along the lines of the event that PayPal goes into insolvency that I would have no claim against the funds…..Most odd I thought and makes me feel uncomfortable, as I am holding security deposits against damage to my property whilst people are in my apartment. Just wondering if anyone else has come across this.

  17. #16 It’s a warning that you’ve had a balance of over £1000 in your PayPal account for the first time and to inform you that you don’t have the same rights as if you had over £1000 in your bank account. Nothing more, nothing less 🙂

  18. I foolishly bought something from a trader not on eBay using PayPal. The delivery company, on discovering I was not in, gave the package to someone on the street.

    I didn’t get the package…

    So I told the trader and they said I had to claim from the courier, the courier said I couldn’t do that. I went back to the Trader and discovered they didn’t have any insurance with the courier so I asked for my money back.

    The Trader said they had a signature and that was that. I disputed the payment from PayPal but PayPal settled in favour of the Trader because they had a signature.

    I told PayPal that the courier had delivered to someone on the street, but the Trader had checked the “I have a signature box” and that was the end of PayPal’s interest.

    So I blocked the payment from my credit card and PayPal has suspended my account.

    So, my advice, don’t buy anything outside of eBay using PayPal.

    PayPal will always take the side of the Trader and not you.

    BTW: if you don’t receive an item you can recall any payment no matter how small.

  19. #18 – The courier would have put a card through your door with the address they left the package at. They would also have a name a signiture of that person. Go and get your parcel off them if they don’t give it you call the police.

    Palpal will never take the side of the trader, they always take the side of the buyer. There is no “I have a signature box” at all.

  20. #14 The PayPal Visa card is effectively a debit card with a topped up balance where you have no line of credit and you don’t have the same protections with a debit card that you have with a credit card with any bank.
    And as #15 points out PayPal is a registered bank.


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