The PayPal vs. credit card debate is an old one, and the answer varies depending on the user’s situation, needs and requirements. While PayPal claims the sole purpose of the service is to make online transactions safer, scammers are always devising novel methods of defrauding people of their money. PayPal and credit card companies both strive to make transactions safe.
PayPal’s strengths include the fact that platforms such as eBay have PayPal as the default payment method, and PayPal allows users to receive and send money quickly to any other person in any country that supports the service.
Another reason why PayPal might be the better option than a credit card is the fact that PayPal offers a secure mobile app that activates contactless payments at physical retail shops. PayPal also owns Venmo and Xoom, apps that allow users to send and receive money with a smartphone.
PayPal tries to offer the best features of conventional credit cards as well by offering the PayPal Cash Card, a MasterCard debit card that users can purchase items with in physical stores and online. PayPal also now offers a PayPal credit card. The company leverages a partnership with Synchrony Bank to offer two credit cards to users who qualify. Synchrony and PayPal also offer a line of credit feature.
Starting in 2020, PayPal started to offer cryptocurrency as well. Online users can now use PayPal to sell, buy, hold and check out with cryptocurrencies.
Although the features mentioned above allow PayPal to reach more customers and increase the number of transactions occurring on the platform every year, the features are designed to secure online transactions on a fundamental level. Credit card companies also have many security measures in place, but PayPal offers some advanced cybersecurity features that very few banks are able to deploy and maintain.
The strong points of credit cards include protection against abuse of stolen physical cards and stopping unauthorized transactions via online platforms. Another indirect advantage of credit cards in the U.S. is that the law states the user is only liable for up to $50 of damages as a result of fraudulent transactions via stolen credit cards.
Credit card companies have tried to catch up to payment services such as PayPal by introducing new security features, including chip credit cards. Such credit cards make use of a chip that gets inserted into a chip reader when customers pay for items or complete transactions. Older credit cards had a magnetic stripe that the merchant or retailer would swipe on the side of a reader to allow users to pay for items.
Keeping in mind all the features of both credit cards and PayPal, users should be able to see PayPal as the safer option. PayPal employs all the latest security measures necessary for safe electronic transactions and has a bug bounty program that pays people who find vulnerabilities within the system.
Comparatively, not all credit card companies employ the latest technologies to safeguard users and typically have underdeveloped refund policies.