What makes a reliable payment service provider

PayPalHow secure is the payment service provider?

Using PayPal is relatively easy and can be very convenient. You store your account details or credit card number and can then pay with your username and password. David Riechmann knows how secure PayPal actually is and where there are problems with the service provider. He is a financial expert at the North Rhine-Westphalia consumer center.

Sandra Pfister: Is there any catch with PayPal?

David Riechmann: You always have to be careful what you do. This is important. Currently, you only have to log in with an email address and a password. For example, the account can easily be taken over. There is also sometimes abuse, scams that run with PayPal, that you send money and then receive no goods. There are such cases with us again and again, at the consumer advice center.

Two-factor authentication is important

Pfister: Is PayPal safe in principle?

Smellman: In terms of technology, it is a secure system. But of course accounts can be taken over, or criminals can misuse the stolen account data. What you should pay attention to is, for example, that you not only rely on your email address and password when you log in, but also leave a telephone number. Then you get a number sent when you register, which you then have to enter, a two-factor authentication. That makes things safer from abuse again. That would be the first step in making it safer for yourself.

No buyer protection with the "Friends and Family" function

Pfister: The "Friends and Family" function is intended for private purposes. But it has also happened to me, for example, that small tradespeople, such as the yoga teacher, asked someone to transfer the money via the "Friends and Family" category and not under the heading goods and services, which is directly below stands. Is that suspect in itself?

Smellman: If you know the person really well, then of course you can, because the benefit for the payee is that he pays nothing for this transfer. Commercial merchants pay fees when using PayPal. If you send money to friends and acquaintances using this function, it doesn't cost any money. The problem with the whole thing is, if you use this function, that you don't have any buyer protection. That means: If you buy something on eBay, for example, and do not know the dealer, then you should definitely not use this money-sending function to friends and relatives, even if the dealer attaches importance to it, because if it is then a case of abuse, you stand there without this buyer protection.

When there are problems with the seller

Pfister: What does this buyer protection mean exactly?

Smellman: This means: If you have problems with the retailer, for example the goods do not come, you can contact PayPal and they will check it, ask the retailer whether he has sent the goods, and they will then make a decision, if you get the money back. But this does not apply to all purchases. You have to look carefully again. If you gamble or something, PayPal won't pay you back. Or if you make any investments where the value can go up or down; for example, buyer protection does not apply. If you are unsure about this, it is better to take a look at the terms and conditions to see whether the purchase is actually covered.

It is also important if you have a dispute with the retailer - these are the cases that we often get into - that people then, for example, let the PayPal direct debit go back to their house bank, and then they get into trouble with PayPal because that Account is in the red. I buy something, the goods don't come, I see on my checking account, oh, there is the direct debit from PayPal, I'll just get the money back. But then you don't get the money back from the merchant, but from PayPal, who take on a role similar to a bank there, and then PayPal says, your account is 100 euros in the red, that can't be, please compensate, or we will block yours Account.

PayPal is connected between the merchant and the buyer

Pfister: Because in that case it becomes quite obvious that PayPal is only the broker of the money.

Smellman: Exactly. You are a payment service provider. They are more or less like an extra bank that is switched in between. But at first they have nothing to do with the sales contract, and if you simply withdraw the money, then the PayPal account is in the red, but the merchant still has his money. If he then refunds this to the customer's PayPal account, the account is balanced again, no problem. But if he doesn't do that, then the account is in the red for the time being, which is of course stupid and that can also lead to problems with PayPal.

Hidden fees for payments in other currencies

Pfister: Then there is a little pitfall. PayPal does not charge any fees per se, but somehow it does, namely when I shop in a foreign currency, buy any goods abroad. How does that go?

Smellman: If you have foreign currency, dollars, pounds sterling or something, then a currency rate is used. This currency rate may not be the best currency rate the customer could get in the market. This difference is then used to earn money. At first, the customer does not notice it. He then pays his $ 20, for example, gets the exchange rate in euros, but he might have gotten a cheaper rate somewhere else and so that's a fee that he doesn't obviously pay, but which ultimately also burdens him.

Statements by our interlocutors reflect their own views. Deutschlandfunk does not adopt the statements of its interlocutors in interviews and discussions as its own.