This is PayPal

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Pay Pal is one of the most popular service providers for payments on the Internet. According to its own data, more than 300 million people use it worldwide.

Until 2015 PayPal belonged to the online auction house eBay, since 2015 the company is independent. Its headquarters are in California, and the European subsidiary PayPal (Europe) S.à r.l. & Cie, S.C.A. is based in Luxembourg.

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

Anyone who creates an account with Paypal is not assigned an account number, but all payment transactions are handled via the e-mail address stored.

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

PayPal is available as an app for Android and iOS. The service is free 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.

More on banking and payment in our focus.


Advantages of PayPal


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

This means that payment recipients do not have to wait for days until the money arrives, as is sometimes the case with bank transfers.

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

Under certain circumstances, the service also protects its buyers from fraud and money loss. If an order does not reach the recipient or deviates greatly from the expectations, the service provider reviews the case and, if necessary, refunds the payment amount.

Disadvantages of PayPal


According to the privacy policy, the service collects a lot of information around the transactions of its users*. It collects and stores information about who buys what, when, from whom and for how much, as well as the address to which the goods are delivered. The apps also transmit device information such as hardware data and location.

In addition, according to the privacy policy, PayPal can obtain additional information about its users from other “merchants, data providers, and credit reporting agencies.

What’s problematic is that PayPal reserves the right to share all of this data – with other members of its group of companies, with merchants, financial institutions with which it has a partnership, and with “other third parties for business reasons.”

This includes sharing personal data for marketing purposes. When you set up PayPal, you automatically gave this consent – here you can withdraw it later.

Conclusion


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

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

In theory, the provider can pass on these insights about you to any company at any time – because what all falls under “business reasons” is defined by PayPal alone.

There are almost always other ways to pay online, for example by direct debit or credit card. Here, less transaction data is generated – and you can object to the data analysis by your credit card provider.

For Master and Maestro credit cards, you can object to the data analysis here. If you use a VISA card, you can object here.
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Pay Pal is one of the most popular service providers for payments on the Internet. According to its own data, more than 300 million people use it worldwide. Until 2015 PayPal belonged to the online auction house eBay, since 2015 the company is independent. Its headquarters are in California, and the European subsidiary PayPal (Europe)…

Pay Pal is one of the most popular service providers for payments on the Internet. According to its own data, more than 300 million people use it worldwide. Until 2015 PayPal belonged to the online auction house eBay, since 2015 the company is independent. Its headquarters are in California, and the European subsidiary PayPal (Europe)…