Is PayPal Safe? Discussing its Risks

September 5, 2025 By Nancy William No Comments 8 minutes

Is PayPal safe? PayPal is one of the most widely used online payment methods, but many often wonder if it’s secure. It’s always crucial to know more about what online payments you use and whether or not they’re safe. It’s especially necessary to look into since you’re dealing with your Credit card information or sensitive data. So, is PayPal secure? Let’s get to it. 

What is PayPal?

PayPal is one of the leading modes of electronic payments. It is a technology company that deals in finance. Its services are catered to both individuals and businesses. If you’re wondering whether it’s available globally, then yes, PayPal operates in several countries around the world with over 430+ million active users that was recorded in 2024. 

It’s created as a means of quick and easy sharing and receiving of money or payments online, and from one user to any service or vice versa for refunds. PayPal money can be sent to family members, friends, businesses, or auction sites like Auction.com, eBay, etc. It’s also used as a safe method for buying security software, like the best VPN service.

What is PayPal Credit?

PayPal Credit is a reusable online credit line available in any country or service where PayPal is accepted. For purchases of $100 or more, it offers up to six months of interest-free credit, giving you extra time to pay. There’s no yearly fee, but if the balance isn’t fully paid off within six months, interest charges will apply.

Is PayPal Safe?

According to many, PayPal is generally safe, but to what degree? It’s a fact that there is not a single mode of online payment that is 100% safe. Is PayPal legitimate? Yes, it is, but no one can vouch for its complete safety. Online payment methods like PayPal are only as safe as the security practices conducted by the users. However, if we talk about PayPal’s terms of service, the only loose nut would be that it can close anyone’s account if it feels like it. This has happened in the past, where users lost some of their funds when PayPal shut their accounts without warning.  

Even though the PayPal policies ensure complete encryption and protection of all data, how is PayPal safe from external threats? Yes, all data might be secured, but that is only a possibility if you’re connected to a secure network.

The moment you make any purchases using PayPal while connected to free WiFi or unknown networks, that in itself is a huge threat. These vulnerabilities can cause hackers to read your information. It’s one of the many reasons why we recommend connecting to a reliable VPN like FastestVPN that offers online protection, among other features. Plus, even though it’s not at large, there are also quite a few PayPal scams to stay clear of. 

In short, yes, PayPal is safe, but you need to take active precautions while using it. 

PayPal Risks and Scams

PayPal is an incredibly convenient tool for managing money online, but like any financial system, it comes with inherent risks. Understanding these pitfalls is the first step toward protecting your funds. This guide breaks down the primary risks for users and the common scams you need to recognize.

Risks with PayPal’s System

Here are some of the risks associated with PayPal’s systems:  

Account Limitations and Freezes

This is one of the biggest risks for sellers. PayPal’s automated systems are designed to detect unusual activity that might indicate fraud. If triggered, they can immediately place a hold on your account or restrict your ability to withdraw funds. 

There are a few of its common triggers. Some of these include a sudden, large spike in sales, a high number of customer disputes, or selling items considered high-risk. While intended for security, this can severely disrupt business cash flow, and resolving it often requires extensive documentation and time.

The Buyer-First Dispute Resolution (Chargebacks)

 PayPal’s purchase protection heavily favors the buyer. A customer can file a dispute claiming they never received an item (“Item Not Received”) or that it was significantly not as described (“Significantly Not as Described”). 

Even with proof of shipment and delivery, sellers can lose these cases, resulting in a forced refund (a chargeback) and the loss of the item. This system, while great for consumer confidence, is vulnerable to abuse by dishonest buyers.

High and Unclear Fee Structures

For businesses, PayPal’s fees can eat into profits. Transactions across international borders incur higher fees. There are also fees for currency conversion, which uses an exchange rate set by PayPal that includes a margin above the wholesale rate. It’s crucial to factor these costs into your pricing model to avoid unexpected losses.

Common PayPal Scams and How They Work

Fraudsters have developed sophisticated schemes over the years, and you won’t believe it, but there are some designed to specifically target PayPal users.

The Fake “Payment Received” Email Scam

This is a classic. A scammer will agree to pay for an item you’re selling. Instead of sending money, they forge a convincing email that appears to come from “[email protected]” stating that your payment is pending or completed. The email will often claim the funds will be released only after you provide a tracking number. To be put more bluntly, never ship an item based on an email alone. Always, without exception, log in directly to your official PayPal account to confirm the payment is in your balance before taking any action.

The Overpayment Scam

A buyer offers to purchase an item from you, often at full price or above. They then send a payment for much more than the agreed-upon amount. They’ll contact you with a frantic story, claiming it was a mistake, and ask you to refund the “extra” money via a separate transaction. The original payment was made with a stolen credit card. When the legitimate cardholder reports the fraud, PayPal will reverse the entire original payment. You are left responsible for the full amount, and the “refund” you sent comes directly from your own funds.

The Family and Friends Loophole

A buyer may insist on paying you using the “Sending to a friend” option to avoid PayPal’s seller fees. This is a massive red flag. Payments sent this way are not eligible for PayPal’s Seller Protection. You cannot dispute the transaction if the buyer later files a chargeback with their credit card company. You will have no recourse to get your money or your item back. Always require buyers to pay with the “Goods and Services” option.

How to Protect Yourself While Using PayPal

• Verify everything in your account: Do not trust emails or texts. To check the status of a payment, open a new browser window, go to paypal.com yourself, and log in. If the money isn’t there, the transaction hasn’t happened.
• Use a VPN: A VPN paired with PayPal is one of the best practices. Online payments are more of a risk compared to physical payments, but using a security tool like a VPN helps. With FastestVPN, your connection is encrypted, limiting the risks of cyberattacks or scams while using PayPal. 
• Use “Goods and Services” for sales: Never use the “Friends and Family” option for business transactions. The small fee is the cost of doing business and buying crucial protection.
• Always keep detailed records: For sellers, save all proof of shipment and delivery (with tracking numbers), item descriptions, and communication with buyers. This is your evidence in a dispute.
• Enable Two-Factor Authentication (2FA): This adds a critical second layer of security to your account, making it much harder for hackers to gain access even if they have your password.
• Be wary of urgency tones: Scammers create a false sense of urgency to pressure you into making a mistake. Take your time and verify every step of the process.

Kinds of payment transactions that PayPal offers

There are two kinds of PayPal services:

• PayPal Friends and Family 

• PayPal Goods and Services 

 The services are the same, where you can send money to friends or family from anywhere in the world, and vice versa, and where you can also buy things online using your PayPal account. There is, however, one small, distinct difference. For PayPal friends and family, you will be charged a small fee every time you send money, whereas for PayPal goods and services, the seller will have to fill in the fee.  

PayPal as a Payment Option for FastestVPN

As mentioned above, there are many areas that you could consider using PayPal for, and one of them is for buying a VPN service like FastestVPN. This provider offers the PayPal option mostly because of how safe it is, compared to other online payment methods like Credit cards.  

FAQs – Is PayPal Safe?

To Conclude

And that’s a wrap. Hope these answered your question on “Is PayPal safe?” Other than that, always consider using a few security tools and practices to ensure that your payments using PayPal are safe.