PayPal eliminates the risk of fraud by safeguarding your payment information online, making paying with a debit card just as safe as anything.
If you’ve read this site for any amount of time, you know that I strongly suggest you don’t use a credit card for everyday spend. I’ve covered all the reasons why over the years, so if you’re still doing it, let’s just admit your choice isn’t a rational one. I’ll see your “cash back” and points and raise you how much extra you spend getting that benefit.
But some people believe that using debit card “isn’t safe” because if you’re hacked, then your money is gone, as opposed to using a credit card where you’ve lost nothing.
This isn’t actually how it works in practice. If you report the fraudulent activity within two business days, the absolute maximum you will be on the hook for with a debit card is $50. And even that’s not always true. My debit card was hacked a while back, and my bank reversed all the charges and it cost me nothing.
But let’s allow that peace of mind is important when making purchases, and even this reassurance that you’re most likely not on the hook for any money lost might not be enough. If only there was a way to use your debit card without the risk of it being stolen.
There is. It’s called PayPal.
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What is PayPal?
(Perhaps because of this venerability, I trust it more. The internet was a much less atavistic place back then, and it wasn’t as obvious that pretty much all new services are semi-scams designed to steal your information and force you to become dependent on them. But I digress.)
You can store all of your payment methods, including credit cards, debit cards, and even bank account information in your PayPal account. When you go to make a purchase online, very often there will be a “Pay With PayPal” option, wherein you use PayPal as the intermediary, which charges your desired payment option and then sends that money to the seller.
In short, when using PayPal, at no point does your payment information reach the seller. PayPal handles it all.
Because of this, you can use your debit card without having to worry about any of the (small) risks of using it.
Isn’t PayPal evil?
PayPal, admittedly, has some big problems. They are a black box of a service and have been known to capriciously shut down accounts for no discernible reason. They have no real customer service, so if you’re shut down, you’re basically out of luck.
But arguably this describes pretty much any internet-based service these days, from Instagram to YouTube. Even credit cards can shut you down if they so desire.
The nice thing about PayPal is that they are just a payment intermediary, so you’ve only lost some convenience if the axe comes for you.
Also, never store money in a PayPal account. Just to be safe.
Can we trust PayPal?
A good question, but it helps to ask what we’re comparing this to here. It’s not like credit card companies are some barometer of trust here.
In my opinion, you can trust PayPal as much as you can trust any financial merchant that’s been around for a few decades. In my opinion, that means “just enough”.
What about in-person purchases?
I believe that most frauds either come from online (a hacked database) or someone randomly stumbling on the exact digits of your card. (Here are some more ways that people can steal your card numbers.)
Because of this, in-person purchases don’t strike me as particularly risky.
That said, PayPal, like every other service, has an app, and if the merchant is set up to use it. It’s as simple as scanning a QR code.
What about Venmo or Samsung/Apple/Google/Whatever Pay?
Yes, as far as I’m aware, you can use any of the following services to more or less accomplish the same task:
- Samsung Pay
- Apple Pay
- Google Pay
I can’t recommend or not recommend any of these services because I’ve never used any of them. I’ve just never needed to.
But if you use Venmo, make sure to not make your purchases public.
One less excuse to use a credit card
So as you can see, if you’re worried about fraud and loss of funds from using a debit card (which you probably don’t even need to be), you can use PayPal or other similar service to shield your debit card information from the merchant, reducing risks to near zero.
Now you have even less excuse to use a credit card for everyday spend.