Is PayPal safe?

PayPal has been active in digital payments for over 20 years, transforming the way we shop online, and connecting people and businesses the world over. An amazing 429+ million customers and merchants have PayPal accounts already – but if you’re new to PayPal you may well be wondering – is PayPal safe?

This guide covers what you need to know about PayPal US – how it’s regulated, the measures in place to keep customers and their money safe, and more.

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Quick summary

  • Operating globally for 20+ years
  • Huge user base of over 429 million customers
  • Overseen by the Consumer Financial Protection Bureau
  • State level licencing, plus FDIC insured banking partners for some services
  • Globally regulated by a range of authorities

Is PayPal safe?

Yes. PayPal is a safe and trusted provider, operating in almost every country in the world, and overseen by multiple global regulatory bodies, including a range of US jurisdictions.

  • Year founded: 1998
  • Regulation: Holds multiple US state licenses, and is overseen by other global bodies like the FCA in the UK, and authorities covering the European Union
  • Number of customers: 429+ million global accounts
  • Amount transferred: 340 billion USD total transactions processed

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How is PayPal regulated?

PayPal is a global business, and as such it is regulated by a range of bodies around the world.

In the US, PayPal’s core payment services fall under the Consumer Financial Protection Bureau, with additional money transmitter licenses in place at a state level. As well as falling in line with the requirements of these regulatory bodies, PayPal actively contributes to the development of best practices within the industry.

Because of the varied nature of the products offered by PayPal, some services are actually delivered in partnership with banks – which also adds another layer of regulatory oversight to the way the business operates.

Is PayPal as safe as traditional banks?

PayPal isn’t a bank, and the services it offers aren’t the same as you’ll find from a traditional bank. However, where there’s an overlap in the services provided by PayPal and those you’d get from a regular bank, PayPal will be regulated in much the same way as a bank would be. This means it’s as safe a provider to choose for the services it offers.

One notable difference in the services PayPal offers compared with banks is the range of ways to buy and sell online. PayPal has enhanced buyer and seller protections in place, plus arbitration and clear rules to help make sure consumer and merchant transactions are smoothly processed. This can make PayPal an attractive provider to choose if you’re shopping online, as you’ll know you’ve got an added layer of protection there in case something goes wrong.

How does PayPal keep your money safe?

PayPal uses automated and manual processes to keep customer funds safe and prevent fraud. As one of the first digital and ecommerce payment providers, PayPal has been at the leading edge of some of these measures, such as tokenization – the process of encrypting and limiting the access to sensitive data when transacting online. PayPal also has verification processes in place when customers open an account, uses secure log-ins and has a 24 hour anti-fraud monitoring operation.

If you have a PayPal digital wallet account, and use it to hold a balance (rather than simply using PayPal to make fast payments from your bank account or card), your money will be held by one of PayPal’s banking partners. This will be a reputable, FDIC insured provider, and also means your money can never be mixed with PayPal’s own operating capital – a process commonly called safeguarding.

Is PayPal safe to transfer money?

Yes. PayPal offers convenient and instant ways to send payments to individuals and businesses. As long as you follow basic common sense precautions, it’s a safe service to use. This means checking you have all the correct details for the person you’re paying, and only sending money to individuals or businesses you know and trust.

Once PayPal payments have been made, they can’t usually be canceled or returned – so double checking everything before you confirm the transfer is good practice. If there’s a problem with a business transfer, you may need to open a PayPal dispute in the Resolution Center to get support.

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Is PayPal safe to keep money with?

In many cases, you won’t need to hold a balance with PayPal. You may simply choose to use PayPal as a convenient way to make secure online payments which are funded directly from your bank account or card. However, some PayPal account types do let you hold a balance – and in this case, the money will be deposited with an FDIC insured banking partner for safe keeping. This means you can rest assured PayPal is safe to keep money with.

Is PayPal safe for large amounts?

If you need to make a large transfer, PayPal can help. To make sure your payment is processed smoothly and without delay, it’s worth making sure your PayPal account is fully verified before you make a start. And if you’re paying from your linked bank account or card, you’ll also want to check if they impose any limits of their own which may impact your transfer.

It’s helpful to know that PayPal has limits on the maximum amount you can send, which may vary according to your account type and the currencies involved. Verified accounts can usually send up to 60,000 USD, with a limit of 10,000 USD per transaction in some cases.

Best ways to large international transfers

Is a PayPal business account safe?

Yes. PayPal offers services to many merchants all around the world, with secure accounts and payments backed by a strong range of automatic and manual protection measures. Read more on PayPal Business Account Review.

Is PayPal legit?

PayPal now offers so many services, including some which are available fee free. If you’re wondering if PayPal might just be too good to be true, you don’t need to worry.

PayPal is a giant in the world of digital payments and online shopping. It’s safe to use as long as you take basic precautions – pretty much the same as you’d need to with any financial service provider. Read more on How does PayPal work.

Customer reviews on Trustpilot

Before you choose a company to use for your digital payments, it’s a good idea to check out some reviews from previous customers. Trustpilot is a good place to do that, with live reviews from previous customers and a star rating system to see at a glance how the business is interacting with consumers.

PayPal has claimed a profile on Trustpilot, but isn’t active in replying to customer feedback within the site. That means that – relative to the number of PayPal customers out there – the number of reviews is rather low, and with a slant towards people looking to lodge a public complaint. This isn’t necessarily representative of how most PayPal customers feel about the services offered – but it’s still useful to scan through recent issues to get a flavor.

  • PayPal Trustpilot score: 1.3 stars (out of 5), Bad rating, from 22,000+ reviews

From a security perspective, where this comes up in reviews it seems to be frequently connected to PayPal’s verification checks which can slow down payments. These checks are legally mandated, and would be needed even if you were processing the transfer with another provider or a bank.

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Can you get scammed on PayPal?

Scammers and fraudsters do operate on PayPal – as they do on many other financial platforms. It’s important to take basic precautions when using PayPal, such as creating a strong password and keeping it private, avoiding public wifi systems when transacting, updating your account settings to keep them secure, and checking your financial statements frequently to spot anything unusual.

It’s also worth knowing that email fraudsters often send emails purporting to be from PayPal in an attempt to extract sensitive information from customers. Double check any mail you receive, and never click on embedded links to log into your account.

Can I avoid falling victim to a fraud?

Basic safety precautions should be all you need to stop yourself becoming a victim of PayPal scams. However, if you’re unlucky enough to be a victim, you’ll need to report it to PayPal directly online or in the PayPal app. You’ll then be guided as to the other necessary steps based on the specifics of the issue.

Is your personal data safe on PayPal?

Yes. PayPal has a full online privacy hub where you can find out more about your options in terms of the data they record, use and keep. PayPal is transparent about the data it needs to collect to operate, and offers customers ways to manage their personal information and privacy as much as is possible with a mind to legal and practical requirements.

What personal data does PayPal collect?

PayPal needs to collect data about customers to offer its services, comply with the law and for marketing purposes. The data collected varies but can include:

  • Information that identifies you
  • Financial information
  • Personal characteristics
  • Commercial information
  • Internet and network activity
  • Location
  • Audio, digital and biometric information
  • Employment information
  • Information inferred from the above

Data is held for as long as legally or practically required, which can often be 6 – 10 years based on the information type.

How to get started on PayPal?

It’s easy to create a PayPal account:

  1. Open the PayPal website or app
  2. Click Sign up for a PayPal account
  3. Choose between a personal or business account, and click Get Started
  4. Enter the required information and click Continue
  5. Follow the instructions to verify your information and link a payment method

As part of the sign up process you’ll need to verify your phone number and email, and link and verify a payment method like your bank account or card. These are pretty simple steps – you can often verify your payment information via your own bank’s online banking service. All instructions are shown on the screen when you start to set up your account.


PayPal is a safe provider to use when you shop online or send payments to others.

PayPal is a leader in online payment safety, and is properly regulated and licensed for all the services it offers. As with any other financial service provider, there are criminals who try to operate through PayPal, including sending spam emails and attempting to acquire customer information. However, with some basic safety precautions you can usually avoid these scams, and stay safe when using PayPal.

Read PayPal ReviewAlternatives to PayPal


Is PayPal safe?

Yes. PayPal is safe to use, with a huge global customer base and a 20 year history in e-commerce and online payments.

How is PayPal regulated?

PayPal is regulated in the US and around the world. In the US, PayPal is overseen by  the Consumer Financial Protection Bureau, and also licensed at a state level for many services.


Claire Millard
Fintech Content Writer
Claire Millard is a content and copywriter with a specialty in international finance. Her work has featured in The Times and The Telegraph, as well as industry magazines and leading personal finance blogs.
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Seyma Mektepli
Seyma is an experienced content writer and editor-in-chief at Exiap, delivering informative articles on personal finance, and money transfers.
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Last updated
September 30th, 2022