[Tarball10]

Holding money (or crypto) in PayPal is a terrible idea. They are not a bank, they do not abide by banking regulations. They can lock you out of your account and your money at any time and leave you going in circles with their offshore support.

Yes, they are somewhat of a necessary evil if you do any online peer-to-peer buying/selling, since they are the only money transfer service that provides some level of "buyer protection", but you want to do the bare minimum with PayPal to avoid unnecessary risk.

Link one bank account (not your primary) to PayPal to receive money, and transfer received money immediately. Link one credit card for purchases. Nothing else. Do not link debit cards, do not sign up for their "balance account" where money is held in PayPal (no matter how hard they push it with UI dark patterns in their app), do not sign up for their crypto account.

[throwaway-0001]

If you link your bank, and approve direct debit (it’s just a popup with yes/later - very risky move), they will eventually withdraw from it when there are any issues. And most likely you’ll lose more disputes when your bank is linked - but no proof of this so take it with a grain of salt.

[praptak]

Fortunately I can review direct debit consents and revoke them via my bank's web app UI.

[Havoc]

Plus they have a history of freezing people’s money for months on end for flimsy reasons.

[kotaKat]

Staring at a “you can no longer do business with PayPal” email myself. No clue what I did, no recourse, now locked out of a fuckton of global marketplaces and peer to peer transactions that uniquely only work on a platform like PayPal.

[babyshake]

If this happens to you, I imagine it is grounds for legal action?

[seydor]

In europe, Paypal Sarl is a bank subject to bank regulations

[Tarball10]

Good point. I should have clarified that I'm referring specifically to PayPal in the US, which themselves state that "PayPal is not a bank, does not take deposits and is not FDIC insured".

https://www.paypal.com/us/legalhub/paypal/program-banks-tnc

[croes]

But they don’t offer deposit guarantee. Banks usually have to in the EU

[layer8]

It isn’t subject to the EU statutory deposit insurance, however.

Edit: The above means that deposits on your PayPal account aren’t insured, different from regular bank accounts in the EU. This is a frequently emphasized caveat regarding the use of PayPal as a bank account in the EU.

[lucb1e]

> They are not a bank, they do not abide by banking regulations.

"In 2008, PayPal Europe was granted a Luxembourg banking license, which, under European Union (EU) law, allows it to conduct banking business throughout the EU.[173] It is therefore regulated as a bank by Luxembourg's banking supervisory authority" https://en.wikipedia.org/wiki/PayPal#Regulation

You're not wrong that they don't act like an honest bank, or abides by any sort of ethics about whose money it really is that they're holding onto... but know that they are regulated in case that ever helps you!

[Analemma_]

This is all true, but are they actually any worse than any other crypto exchange? I just take it as a given that a crypto exchange can lock me out and steal my money at any time with no legal consequence, and so I try to keep as little money in them as possible. And at least PayPal is older and likely to have more senior engineers and fewer vibe coders, and thus be less likely to lose everything because of an elementary security error.

[spacebanana7]

No startup can compete with PayPal's decades long track record of suspending accounts and freezing funds.

[Animats]

> Link one bank account (not your primary) to PayPal to receive money, and transfer received money immediately.

Costs 1.5%. Or wait a few days.[1] Plus a fee for receiving cryptocurrency. There are additional fees for buying cryptocurrencies, other than PayPal's own. And none of this is FDIC insured.

[1] https://www.paypal.com/us/legalhub/paypal/pp-balance-tnc?loc...

[Karrot_Kream]

Their fees for cryptocurrency are small (between 1.5% - 2.5% depending on amounts, higher amounts have a lower fee), but they take it on both the buying and selling end. So if the amounts you're moving require a 1.8% fee, then for both buying and selling you end up with 3.6% in fees. Coinbase and most other CEXes charge this and they claim part of the fee is due to instability in the price, so this fee acts as a spread they can use to not lose money.

[margalabargala]

I think they meant, initiate the transfer immediately. There's no need to pay for the "fast" transfer vs standard ACH.

[jonbiggums22]

I assume you can't use Crypto instead of the bank account link, you probably require both. Otherwise this might have some use as another blast radius reducer for Paypal's antics.

I switched to a hardly used checking account for paypal after they held $20 hostage for a couple months after selling an old video card on ebay. I'd heard some one say their bank account had become frozen by paypal during a dispute and that event reminded me of it enough to get some separation.

[BinaryIgor]

Just treat it as your checking account; for anything substantial, move it to the self-custody

[Karrot_Kream]

> They are not a bank, they do not abide by banking regulations.

In the US, this is true with some important caveats.

"If you have opened a PayPal Debit Card Mastercard® account, enrolled in Direct Deposit, or bought or received cryptocurrency with your personal PayPal Balance account, we will place your U.S. dollar PayPal Balance funds at one or more Program Banks. Any other balance funds and all cryptocurrencies are not held in FDIC insured bank deposits. Cryptocurrencies may lose value." [1]

[1]: https://www.paypal.com/us/legalhub/paypal/program-banks-tnc

[rnhmjoj]

> They can lock you out of your account and your money at any time and leave you going in circles

All very true, but banks are doing exactly the same thing, all while following banking regulation: https://news.ycombinator.com/item?id=38150606

[xyst]

What’s odd is that Germans LOVE using PayPal. The pseudo banking system that PayPal offers is apparently light years ahead of traditional banking in Deutscheland.

[FabHK]

The banking system is fine. It’s just that credit card use is not very widespread in Germany. PayPal (linked to bank accounts) is then fairly convenient online.

[NoiseBert69]

It was faster until a few days ago.

Now instant payments using SEPA are mandatory and rolled out everywhere.

[PHGamer]

seriously. given how sellers and creators have had their accounts locked and sometimes not gotten their crap back. it would be unwise. if your going to buy crypto on paypal make sure they let you forward it to your own wallet.

[EbNar]

What's the problem with debit cards?

[bix6]

Debit cards generally have less recourse for fraudulent transactions compared to credit.

[AfterHIA]

I always keep a few bucks on the PayPal card to forget about until the next time I don't have my card and I'm like, "oh shit I have enough for a beer on this bastard" and it's like a mini-Christmas.

The thing that gets me is the 40% cash back on Walmart purchases up to 500$. It's such an incredible incentive it has to be shady af. Are the Rand oligarchs trying to buy out the poor? We'll never know because poor people don't have PayPal accounts.

"A something-or-another big enough to give you everything you want is a something-or-another big enough to take from you everything you have." -Voltaire

[squigz]

Why does their support being "offshore" matter at all? If they wanted to provide good, user-friendly customer support, they would, regardless of where the reps are?

[loloquwowndueo]

> If they wanted to provide good, user-friendly customer support, they would

Has this been your experience with PayPal?

[vorpalhex]

Offshore support is unloved and powerless. They can't and won't fix any issue. They exist to fulfill the obligation to provide support in the cheapest form possible.

[Tarball10]

Fair enough, maybe "outsourced" would be a better way to put it. Basically they want support to cost them as little as possible and do not particularly care whether it actually offers any useful help to customers.

More specifically, their support cannot actually do anything to resolve problems. They read off what their computer screen is telling them. They can't take any actions to fix things.

[Muromec]

Because it's offshore so it would be cheap, which already provides a metric that is being optimized.