Thanks to its strong security, PayPal is considered one of the safest payment methods available. It’s also accepted by countless online shops and services — no wonder then that hundreds of millions of us around the world pay for our online purchases with PayPal. This article explores PayPal’s general security measures as well as the special protection features for buyers, sellers, and personal payments. You’ll also learn about the risks associated with PayPal and how you can protect yourself — such as with a free cyberprotection solution like Avira Free Security.
What is PayPal and what security features does it offer?
PayPal is a US-based payment service provider that acts as an intermediary, enabling online transactions between PayPal accounts of individuals as well as payments to businesses. Through its subsidiary Xoom, PayPal offers many additional services, including international money transfers to bank accounts, debit cards, mobile wallets, and cash pickup.
You can now also use PayPal for in-store payments, such as by using a digital or physical PayPal debit card or via QR codes. These codes are either generated by the merchant for you to scan or generated by you and scanned by the merchant, although the QR code payment service isn’t yet available in every country.
To make payments via PayPal, all you need to do is link a debit or credit card or bank account to your PayPal account or have a PayPal balance. For payments, your PayPal balance is always used first. If you have insufficient funds, the linked payment source is then used. You can top up your balance using the app or on the website via your linked bank account (and in some countries, like the US, also via a linked Visa or Mastercard debit card).
As it’s so easy, fast, and secure to use, PayPal is very popular with both customers and merchants — and it’s also frequently used for money transfers between friends. PayPal offers its own protection and security mechanisms for each of these scenarios, which we’ll examine in more detail later. But before we get to that, we’ll begin by taking a look at PayPal’s general security measures.
Latest encryption technology: PayPal uses TLS/SSL encryption to protect all transactions, with sensitive data transmitted securely via HTTPS to legitimate PayPal servers and protected against unauthorized access.
Advanced scam detection: PayPal uses scam detection software to monitor all transactions and account activity 24/7.
Passkey log in: PayPal offers passkeys as a phishing-resistant way to log in instead of using a traditional password. The technology is based on cryptographic key pairs for tamper-proof identity verification. When you log in, facial or fingerprint recognition or your device PIN code is used to unlock the passkey stored on your device and confirm your identity.
Two-stage verification: You can turn on optional two-factor authentication (2FA) on the PayPal website (not in the app), strengthening your PayPal account against unauthorized access. You just need an authenticator app like Avira Password Manager to generate the log in code. You can also use Avira Password Manager to create strong passwords for each of your online accounts as well as 2FA codes for logging in.
Automatic mobile verification: When using your smartphone and this feature is turned on, your cell phone number is matched automatically with the network operator. This makes it easier to log in and verify yourself.
3D Secure authentication: 3D Secure is an additional security procedure for credit card payments, where the credit card holder needs to enter a security code to authenticate themselves. You may need to do this if you use a credit card for PayPal payments.
PayPal Security Center: This is a great resource for learning all about safety, protective measures, and finding out about the latest scams.
Email payment confirmation: Users always receive an email when they send or receive a PayPal payment.
Data protection standards: PayPal uses the internationally recognized PCI-DSS standard, which ensures that companies adhere to strict security requirements when handling credit and debit card payments to prevent fraud and data misuse. PayPal’s systems meet security standards such as VISA CISP, Mastercard SDP, SOC 1, and SOC 2 and are regularly audited by independent experts.
Bug bounty program: PayPal partners with HackerOne to engage the security research community and strengthen the security of its products and services.
Is PayPal safe for buyers?
PayPal Buyer Protection keeps customers safe when paying for their online purchases via PayPal, protecting them from scams. PayPal will refund the full purchase price and original shipping costs if an eligible item doesn’t arrive, is damaged, or does not match the description. Customers must report a problem within 180 days of payment and first try to resolve it directly with the seller. If this is unsuccessful, customers can file a buyer protection claim within 20 days of reporting the problem. After submission of the requested documents and information, PayPal will make a decision regarding the refund at its own discretion.
PayPal Buyer Protection only applies to the purchase of goods and services — not to personal payments to friends and family. In general, all payments processed through PayPal Checkout via an online shop or marketplace are automatically classified as commercial transactions. Buyer Protection also covers PayPal payments for goods and services made via QR code — both online and in-store. However, with PayPal debit card payments, Buyer Protection only covers online transactions and not in-store payments.
Buyer Protection doesn’t cover unauthorized transactions either, even though they’re protected by PayPal. You can report unauthorized account access attempts and unusual account activity in the same way as problems with a purchase. And if you can demonstrate that you didn’t give your consent, PayPal will usually refund the amount.
Is PayPal’s “For Friends and Family” service safe?
PayPal offers the payment type For Friends and Family for personal payments. It’s a quick and easy way to send money to PayPal accounts of friends, acquaintances, colleagues, and family members. This payment type is not intended for online purchases — including purchases from private individuals, such as via second-hand platforms, like Facebook Marketplace or eBay, where the payment method can be freely agreed upon.
Although For Friends and Family saves the seller the PayPal fees that are incurred for the payment type For Goods and Services, it definitely isn’t a good idea since Buyer Protection doesn’t cover personal payments. In addition, scammers often exploit this service as the lack of Buyer Protection makes a refund impossible — so always select the payment type For Goods and Services when paying for purchases from private individuals using the Send Money feature. This option appears after entering the amount and message above the For Friends and Family option.
To improve customers’ protection from scams when making payments to friends and family, PayPal now uses an AI-based dynamic scam-warning feature on PayPal and Venmo for this payment type. The new technology detects potential scams in real time, displaying a warning or rejecting the payment — depending on the risk level. The AI models analyze billions of data points and, unlike static models, learn to recognize new threat patterns. According to PayPal, the system is intended primarily to protect against scams on social media, where users are tricked into sending money to alleged service providers.
Is PayPal safe for sellers?
PayPal also offers special protection features for sellers. PayPal Seller Protection protects merchants from unjustified Buyer Protection claims. These can include instances where a buyer might report an issue with the order and claim that the goods haven’t arrived or they don’t match the description. The protection kicks in if the merchant can provide the required evidence, such as shipping documentation, and the transaction meets the requirements of Seller Protection.
PayPal also offers merchants using the Advanced Credit and Debit Card Payments product an optional chargeback protection service. Once they’ve opted in, it protects merchants against unjustified chargebacks. If the merchant can show that the transaction was legitimate and meets the requirements for protection, PayPal will cover both the chargeback fee and the purchase amount. This helps sellers protect themselves against chargeback fraud (also called friendly fraud), where customers pay online by credit card and later dispute the payment with their bank without a valid reason.
Another optional service, PayPal Fraud Protection for credit and debit card payments, helps merchants spot and stop potentially fraudulent transactions early on. PayPal analyzes payments in real time using machine learning and checks them for suspicious patterns. A tool allows merchants to select predefined filter rules, based on which payments are approved or blocked automatically. For larger merchants or companies, PayPal also offers enhanced fraud protection (called Fraud Protection Advanced). This service includes additional features such as custom filters, advanced analysis tools, and simulation tools for even more granular risk assessment and fraud analyses.
Is it safe to use PayPal for purchases on social media?
PayPal can also be a secure way to pay for purchases on social media platforms, provided you purchase from a legitimate shop and complete your transaction through the platform’s built-in checkout. That’s because, in this case, not only does PayPal Buyer Protection apply but the entire ordering and payment process takes place within the platform itself. One example of this is TikTok Shop: Since it’s integrated directly into the app, payments are processed via an in-app checkout.
In the case of Facebook and Instagram shops, as well as on Pinterest, however, in-app purchases are no longer supported, so customers are redirected to external merchant websites to complete their purchases. This means security depends more on the trustworthiness of the online shop itself, increasing the risk of encountering a phishing site or fake shop. To minimize this risk, Pinterest verifies sellers participating in the Verified Merchant Program and awards them a badge. Facebook and Instagram’s Meta Verified badge offers basic verification for businesses and creators to confirm their account is authentic.
Is it better to pay with PayPal or a credit card?
The advantage of PayPal over credit card payments is that no credit card details are sent to the recipient. This minimizes the risk of your data being exposed if the online shop suffers a data leak. Since you don’t need to enter any payment details when making a purchase, this payment method is also significantly easier and more convenient.
Additionally, PayPal payments are covered by PayPal Buyer Protection, while credit card providers offer similar safeguards through the chargeback process. This process allows payments to be reclaimed within a certain period (usually 120 days) — for example, in cases of fraud, non-delivery, or unauthorized debiting.
Customers who paid by credit card via PayPal can, in the event of issues with their purchase, either use PayPal Buyer Protection or request a chargeback from their credit card provider or issuing bank. So you are essentially doubly protected and can also request a refund via your credit card provider if PayPal turns you down.
What are the risks of using PayPal?
Even though paying with PayPal is considered safe, it’s still best to be cautious in certain circumstances. That’s because there are loads of scammers out there who use the popular payment service to deceive users in its name and lure them into traps. Check out our in-depth article on PayPal scams to learn how to spot and avoid common PayPal scams.
The most common scams associated with PayPal are Phishing attacks. These involves scammers sending fake emails that supposedly come from PayPal to direct users to a fake PayPal website and encourage them to enter sensitive details. These emails often claim that the recipient’s PayPal account has been blocked or restricted for security reasons, and ask the owner to confirm their identity by entering their login details.
You also run the risk, especially on social media, of landing on fraudulent online shops via fake ads. There, you’re also often redirected to fake PayPal websites for payment, where scammers harvest login details to gain access to PayPal accounts.
Data leaks and hacker attacks pose another security risk, which can affect even well-secured systems. These can result in sensitive information, such as account credentials or payment data, falling into the wrong hands and being used for fraud or identity theft. In August 2025, reports circulated about 15.8 million PayPal login credentials that hackers allegedly obtained and offered for sale on the dark web. PayPal itself hasn’t confirmed the incident as a new hack to date, so it remains unclear which of the data come from valid PayPal accounts and which relate to test or fake accounts.
To check if your PayPal login details have been compromised, enter your email address on Have I Been Pwned. If your PayPal account — or any of your other online accounts — has been affected by a data leak, change your password immediately. Remember to always choose a strong password — something that’s a breeze to do with the free app Avira Password Manager.
Tip: Avira Identity Assistant will help you recover your identity in the event of identity theft1. And the integrated Dark Web Monitoring§ service will scour the depths of the dark web for information that you provide to us — such as your email addresses as well as credit card and bank account numbers.
How to protect yourself from PayPal scams
- Regularly check your PayPal account and the bank statements of your linked payment source for any suspicious transactions.
- Report unauthorized payments, withdrawals, and direct debits to PayPal immediately.
- Also report suspicious text messages and emails by forwarding them to phishing@paypal.com (or your local PayPal domain).
- Never pay for purchases from private individuals using the payment type For Friends and Family.
- Use a passkey or two-factor verification to log in to PayPal.
- If an email from PayPal addresses you not by your full name but only with “Hello” or “Dear Customer”, it’s a sure sign that the email didn’t come from PayPal.
- Ignore requests that pressure you to act immediately, especially warnings that claim something will go wrong if you don’t.
- PayPal will never ask you for confidential information such as passwords, bank details, or credit card numbers via email or text message.
- Check the sender details in PayPal emails to reveal the actual email address behind the displayed name. Legitimate PayPal emails will always originate from the @paypal.com domain — or your country code instead of .com — and typically contain the company’s logo and a checkmark to confirm the sender’s authenticity.
- Learn here how to protect your PayPal account from hackers.
- Never open email attachments as they might be infected with malware.
- Never log in to your PayPal account using a link you’ve been emailed or sent via text message as the link might take you to a fake website.
- Install a powerful cyberprotection solution like Avira Free Security on your computer. Alongside protecting you from malware, it also includes Avira Browser Safety to block malicious and phishing websites.
PayPal and Venmo are registered trademarks of PayPal, Inc.
Mastercard is a registered trademark of Mastercard International Incorporated.
Visa is a registered trademark of Visa Inc.
Facebook and Instagram are registered trademarks of Meta Platforms, Inc.
TikTok is a registered trademark of ByteDance Ltd.
1 For identity recovery assistance, contact customer services (Mon-Fri, 9am-4pm). An identity recovery specialist will then call you back within 48 hours.
§ Dark Web Monitoring is only available to residents of Germany. The email address you use to purchase the product will then be monitored immediately following activation. Log in to your account to enter more information to monitor.