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Which is Better: PayPal or Credit Cards?

 2014 was the year when consumers really started to fear the data breach for real. According to the Identity Theft Research Center, there were 761 breaches that year, affecting more than 83 million accounts. Huge names such as Sony, JP Morgan Chases, Home Depot, the US Postal Service, and Target were some of the notables that proved that even companies with deep IT pockets are at risk.


If you fear for your money, you’re definitely not alone. According to the ISACA IT Risk/Reward Barometer, 94% of consumers have read or heard about data breaches and 61% say that they have a take-charge attitude rather than waiting for something to happen.

But what does “taking charge actually mean? Every additional company that has your payment information puts you more at risk. So, if you enjoy the conveniences of a PayPal account – using it makes it faster to handle online payments – are you increasing the risk of your information being stolen?

Just how safe is PayPal? Should you have a PayPal account or should you pay for all online purchases using a credit card and not add one more company to your list?

The PayPal Pros
PayPal v Credit Card

According to PayPal your data is safe, but they would say that, wouldn’t they? They state that all your information is encrypted with the highest level of security that is commercially available. Its servers check your browser to ensure that it employs the latest encryption technology and that your data is stored on servers that aren’t directly connected to the internet.

Slava Gomzin, author of Hacking Points of Sale: Payment Application Secrets, Threats, and Solutions, says that “if you have the choice on the Web, always select PayPal.

PayPal even pays hackers to check if they’re able to find any vulnerabilities in its systems. According to Dean Turner, director of security intelligence at PayPal, “if you care about the product and if you care about your customer’s security, this is what you have to do.”

What About Credit Cards?

Credit cards aren’t as straightforward. Cybersecurity advocates often blast the US credit card industry for failing to phase in chip cards. These cards, already in use in European countries and many others, offer an added layer of security that is not present in the United States. The lack of this technology is one of the major reasons why the US is such a huge target for cyber thieves.

The majority of credit cards are issued by banks – an industry that’s more guarded and resistant to some of the cybersecurity practices that PayPal employs. According to the Financial Services Roundtable, the banking industry doesn’t pay hackers to alert them to any security flaws.

Protect Yourself
PayPal v Credit Card

The best team of cybersecurity experts can only do so much. The rest is in the hands of the consumer. A study found that only 45% of consumers changed their password regularly, and the most popular ones are still “password” and “123456.” If your password is very easy to remember, it’s probably very easy to hack. Change it.

Furthermore, you have to check your credit card and bank statements as often as possible, don’t use the same password for everything, and don’t click on any links in an email, even if it looks legit.

The Bottom Line

So, should you use PayPal or your credit card? Well, since many data breaches come from physically swiping the card, and because PayPal gets high marks for its security, experts advise using PayPal whenever possible. However, don’t link it to your checking account. Instead, link to a credit card, so that you get your credit card’s fraud protections in addition to PayPal’s.


Source: investopedia
Images: depositphotos

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