What can I do with PayPal?

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This is PayPal

Pay Pal is one of the most popular service providers for online payments. According to the company, it is used by more than 300 million people worldwide.

PayPal was part of the online auction house eBay until 2015, and the company has been independent since 2015. The head office is in California, the seat of the European subsidiary PayPal (Europe) S.à r.l. & Cie, S.C.A. in Luxemburg.

In contrast to the American parent company, PayPal (Europe) has a banking license and is controlled by the Luxembourg financial supervisory authority CSSF. According to its own statements, the service does not want to be a bank.

If you create an account with Paypal, you will not be assigned an account number, but all payment transactions will be processed via the stored e-mail address.

In order to be able to use the service for payment, you can either load credit into your account by bank transfer or credit card or set up a bank account via which PayPal debits the money by direct debit. Alternatively, you can deposit a credit card.

PayPal is available as an app for Android and iOS. The service is free of charge for private customers. Merchants pay a small fixed amount plus a percentage of sales to the service provider. The terms of use prohibit merchants from passing this amount on to buyers.

Benefits of PayPal

PayPal can be used to shop in online shops or to transfer money to friends or acquaintances. The money is immediately credited to a user account.

This means that pay recipients do not have to wait days for the money to arrive, as is the case with a bank transfer.

The service does not transmit any bank details to merchants or other payees during payment transactions, which is intended to increase security.

In certain circumstances, the service also protects its buyers from fraud and loss of money. If an order does not reach the recipient or if it deviates significantly from expectations, the service provider will examine the case and, if necessary, reimburse the amount paid.

Disadvantages of PayPal

According to the data protection declaration, the service collects a lot of information about the transactions of its users. It is recorded and stored who buys what, when, from whom and for what amount and to which address the goods are delivered. The apps also transfer device information such as hardware data and the location.

In addition, according to the data protection declaration, PayPal can obtain additional information about its users from other "merchants, data providers and credit agencies".

Extremely problematic: PayPal reserves the right to pass on all of this data - to other members of the group of companies, to merchants, financial institutions with which it has a partnership, and "other third parties for business reasons".

This also includes the transfer of personal data for marketing purposes. When you set up PayPal, you automatically gave this consent - you can withdraw it later here.

Conclusion

The simple and convenient way of using it is a good argument for many people who often pay with PayPal in everyday life. However, users should be aware that this creates personal data that goes far beyond the transaction data of a regular bank transfer.

The information about what you bought with the payment service, from whom and at what time and for what amount, can paint a very detailed picture of your private life and your financial situation if you use it frequently.

The provider can theoretically pass on this knowledge about you at any time to any company - because everything that falls under "business reasons" is only defined by PayPal.

There are almost always other ways to pay online, for example by direct debit or credit card. This results in less transaction data - and you can object to the data analysis by your credit card provider.

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