Online fraud has made many people think twice about how to pay when online shopping. Both PayPal and credit cards offer features and services that help protect you, including fraud-monitoring systems and ways to get your money back if a purchase isn’t delivered as promised.
There are many similarities and some differences between using PayPal or a credit card so choosing between them comes down to your own preferences. Let’s take a look at how each option works so you can decide which one is better for you.
Here’s a quick guide to the different types of protection you’ll get when you use PayPal or a credit card. We’ve focused on the key options most credit cards offer as features can vary depending on which card you’re using.
| Security feature | PayPal | Credit cards |
|---|---|---|
| Fraud monitoring | Yes. | Yes. |
| 24/7 customer service | Yes. PayPal’s customer service hours are 6:00 a.m. PT to 6:00 p.m. PT Monday through Sunday. | Yes. American Express, Mastercard and Visa credit cards all offer 24/7 emergency hotlines for lost or stolen cards as well as for suspected fraud. |
| Two-factor authentication | Yes. You can choose to have a one-time PIN sent to your mobile phone by turning on PayPal Security Key in your account’s security settings. | Yes. If you have a card that offers Mastercard SecureCode, Verified by Visa and American Express SafeKey and shop with participating brands, you’ll be prompted to authorize the transaction with a PIN or other security step. |
| Reimbursement or chargeback | Yes. If an item doesn’t get delivered or if it arrives and is significantly different from the seller’s description, PayPal offers reimbursement for the cost of the item and the original shipping costs. | Yes. If your purchases are not delivered or are not as they were described, you may be able to reverse the transaction by requesting a chargeback. |
| Encryption technology | Yes. PayPal offers encryption for all the financial details you have stored in your account. | No. While credit cards offer encryption for purchases you make in-store, most of them rely on the encryption used by online stores when you make payments over the Internet. |
PayPal offers slightly better encryption, which on some websites could provide you with slightly better protection. However, both credit cards and PayPal offer a number of security features and benefits for when you’re shopping online.
Just about any online store will give you the option to pay with a card. With this method, you’ll provide the following details:
Similar to in-store purchases, card acceptance may vary depending on whether you’re using an American Express, Mastercard or Visa credit card.
Unlike a credit card, PayPal lets you store your chosen payment details in a secure account. You can then make payments through your PayPal account when you shop with a store that accepts it.
PayPal generally does have better encryption when shopping online, but not all retailers accept it as a payment method. If you shop online often, there isn’t much difference between choosing to pay with your credit card or your PayPal account as credit cards offer nearly the same security features as PayPal. You can also setup your credit card as the payment option for your PayPal account.
Compare credit cards here to make the most of your online shopping.
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