What Makes PayPal Secure? 

Daniela Fernandez, Head of Information Security, PayPal Australia, talks to Women Love Tech about how PayPal provides a safe payment option and how it works.

1. How does PayPal keep consumers safe online? 

PayPal is one of the most popular ways to pay for things online for millions of Australians and hundreds of millions of people around the world.  PayPal is widely accepted as a payment method across a range of websites, from online retailers like JB Hi Fi and The Good Guys to travel and accommodation websites.  Best of all, it’s secure, quick and easy. 

With PayPal, you don’t need to enter your credit card details on every website you buy from. When you shop with an online store that accepts PayPal, you simply select PayPal as your payment option and authorise the payment. 

How PayPal works 

Once you link your credit card, debit card or bank account details to your PayPal wallet, your financial information is securely encrypted and stored within PayPal’s system.  Then, when you choose PayPal as your payment method, PayPal sends a unique encrypted token to the online store, and you don’t have to input your financial details directly on the seller’s site. It’s very quick and simple. 

As well as using PayPal to pay for things at a large range of online stores, you can also use PayPal to pay individuals (if you have their email address or mobile number), get paid if you sell something online on a site like Gumtree or eBay and you can also generate QR codes allowing people to pay you digitally if you hold a garage sale or have a market stall. 

What do you pay for this secure functionality?  Well, it doesn’t cost anything to create a consumer PayPal account, and there are no charges when you buy something with PayPal.  However, PayPal does charge sellers. So, if you sell an item online and are paid via PayPal, you will pay a transaction fee. 

What if my purchase doesn’t arrive or is a knock-off? 

In addition to being a secure way to pay, PayPal’s Buyer Protection Policy can help you get a refund if an eligible item you’ve purchased doesn’t turn up, is damaged, or is significantly not as the seller described it. 

PayPal’s Buyer Protection, however, is not available for second-hand goods you pick up in person, real estate, motorised vehicles or industrial machinery.  Also transfers to friends and family using a mobile number or email address are not covered, only eligible transfers to businesses. 

What makes PayPal secure? 

PayPal is one of the most secure ways you can pay for things online because you don’t have to provide your credit card or bank details to a seller.  However, you still need to play a part to protecting your personal information.  

You can do this by: 

• ensuring you create a secure password when you create your account (don’t reuse the same password everywhere and avoid using information that can be found easily on social media such as your pet’s name or favourite football team, your name, birthday or car registration etc.), and 
• enabling 2-factor authentication which sends you an individual code to approve each purchase,  
• or you can choose to create a passkey when using PayPal on your Apple iOS or Android phone. A passkey allows you to verify your identity using the digital credentials of your device such as biometric sensors (including fingerprint or facial recognition) and PIN or pattern. A passkey allows you to securely log into PayPal without entering a password. 

And now for some speeds and feeds… 

PayPal has been operating in the fintech space for more than 20 years and has a huge network of customers both on the consumer and business side. 

With more than 400 million active accounts across 200 markets, PayPal has a massive data pool that it analyses with machine learning and predictive AI.  In the calendar year of 2022 alone, the company processed more than 22 billion transactions globally, which is more than 40 thousand transactions per minute … that’s a hell of a lot of data. 

PayPal takes the approach that its systems should be built to expect hostile environments and attacks. When you design with that thought in mind, you do it in a way that you don’t leave data elements where you shouldn’t.  At the heart of the company’s approach is a dual aim: to simplify security for consumers but make it very complex at the back end so it’s almost near impossible for bad actors to compromise. 

When a customer completes a transaction on PayPal, hundreds of different measures are employed to assess the risk or potential for fraud with that particular transaction and that involves many elements of AI.  Over the years, PayPal’s approach has evolved from using logistics regression with tens of variables to neural networks with big data, deep learning, and thousands of variables.  

PayPal monitors account activity 24/7 to thwart fraudulent transactions, compromised accounts, illegal activity, and violations of their policies. The result is that the payment provider has of the industry’s lowest fraud rates of any payments platform. 

2. What are PayPal’s top tips for staying safe online? 

In our increasingly digital world, Aussies need to be constantly aware of scams which are becoming both more prevalent and more sophisticated; and learn how to take precautions against them.  With almost all Australians now shopping online (97% of Australians aged 18-75 now shop online), knowing how to stay safe in digital environments has become increasingly important.¹ 

If you see a deal that’s too good to be true, or you’re being rushed to make a purchase or transfer, or if you visit a website that doesn’t look quite right, think twice. As scams may be tricky to spot, here are PayPal’s top five tips for shopping safely online. 

1. Know your rights as a buyer: generally, the products you purchase online should meet the requirements under consumer protection laws. Online stores should also provide varied and secure payment options, such as digital wallets, to help protect your financial information. 

• Use safe websites: If a website looks suspicious, or an offer looks too good to be true, it probably is. Don’t click on anything, and check for a URL starting with “https” and the closed padlock symbol. When online shopping, legitimate retailers will normally have clear and fair return and refund policies. Consumers should look out for this when deciding who to shop with.   

• Don’t share sensitive details: If you receive an email, text or call asking for sensitive information, such as your credit card number, password, address, or even something like your first dog’s name that could be an answer to one of your security questions, delete the communication or hang up. If the caller has claimed to be from a company you regularly deal with, call the brand’s official phone number or visit their website and log into your account to see if they are really trying to contact you. 

• Read and understand privacy statements: Carefully review the privacy statements when shopping online. Generally, businesses are legally required to disclose how they collect, use, store, and protect personal data. 

• Check online reviews: Reviews can provide insight into current or past customers’ experience with a business. This may help a potential customer gauge the reputation and reliability of a business. Typically, if other shoppers have had negative incidents with a specific company — including fraud — they might post about it online to warn others.  

By taking the right precautions, it is possible to buy with confidence, protect your shopping, and enjoy safe online shopping without compromising your security.