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Home » The Famous Blog » 3 Ways That PayPal Merchant Services Improved Security for Online Business

3 Ways That PayPal Merchant Services Improved Security for Online Business

August 7, 2012 - Last Modified: March 29, 2013 by James Martell

PayPal Merchant Protection

Online retailers, unlike brick and mortar establishments, accept credit cards without the card actually being present for their inspection. Physical retail locations can authorize or decline purchases on the spot, because the financial establishment that issued the card will alert if a card is stolen or some other fraudulent activity is taking place. In the event that fraudulent activity does take place at a brick and mortar location, the financial provider is held responsible and the merchant gets paid just as if the customer had used cash for the transaction.

However, when fraud takes place when a purchase is made from an online retailer, responsibility shifts to the merchant, leaving the card issuer free of any liability. This leaves the merchant unpaid which could mean higher prices for other customers to make up the difference. Some merchants even cancel accounts due to the increased chance of fraud. And in extreme cases, enough fraudulent activity, even via a third party processor like PayPal, can shut down an online retailer completely, leaving them out of business.

How Third Party Payments Work

A third party processor, like PayPal, allows you to use online merchant accounts via your user account or credit card. Online transactions that accept credit cards are overall a risky practice. Depending on the nature of the business, the merchandise or services that are sold could make it an even riskier venture. Combine credit card transactions with high-risk merchandise or services and it’s even more difficult for online retailers to obtain a merchant account.

In addition to obtaining a merchant account, major credit cards, such as Visa, American Express, MasterCard, and Discover, require users to be a registered business. PayPal revolutionized how online merchants can accept payments because unlike other services, PayPal allows merchants to accept credit cards regardless of their status as a registered business or merchant account holder.

Combating Scams

When it comes to conducting business online, PayPal is in the business of protecting its verified merchants. The service takes security seriously, employing a variety of features such as fraud detection and the most innovative security available. PayPal’s data encryption team includes over two thousand specialists who work on ways to detect the latest scams and develop the techniques to combat them. Whether you’re buying textbooks online or ordering new checks from www.personalchecksplus.com you can be sure your PayPal transaction is safe. Some of the things PayPal protects against include phishing scams and stolen identities.

Here are the three steps scammers use to execute a phishing scam:

  1. Mass email – The scammer sends emails out to thousands, or sometimes perhaps even millions, of people at random under the guise of originating from a genuine company, such as PayPal or another online service or retailer.
  2. Links – Cleverly disguised as a legitimate link, clicking on things that look helpful instead lead to a fraudulent site. The false site often cleverly mimics the site mentioned in the email.
  3. Identity theft – Once at the website, the content is skillfully designed to extract personal details about your identity.

Merchant Perks

When sellers are PayPal verified, they not only get paid for things they sell on eBay but also for things in their online store whether consumers pay for their purchases with their credit card or PayPal account. They can even swipe cards on mobile devices that allow the feature. Monthly upgrades allow additional services such as checking out on the website directly versus a link to PayPal, syncing with various shopping cart platforms, and full control over and design of merchant checkout pages.

Regardless of whether an online merchant has Standard, Advance, or Pro membership with PayPal, round the clock toll-free telephone support, fraud protection, and the ability to accept payments in 2 dozen currencies from nearly 200 countries are just a few of the services provided across the board. In addition to online retailers, PayPal offers solutions for online financial transactions for non-profit groups, political campaigns, government agencies, and educational institutions. They even offer a solution finder service to find the right business account to fit the needs of their clients.

Without PayPal, online merchants deserving of a second chance would have less opportunity to conduct business over the internet. Their free services and low rates for extra perks make it easy for new retailers who’ve yet to establish a professional reputation to get started in business. Regardless of the goals of an online merchant or how much business they take in, PayPal offers better services for lower fees, something no other third party processor can provide.

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Filed Under: Business

About James Martell

Follow @JamesMartell

James Martell is an Internet pioneer who discovered the lucrative world of affiliate marketing in 1999. He is a self-taught Internet entrepreneur and a leading expert in affiliate marketing training, outsourcing and natural search engine optimization. James is also the host of the "Affiliate Buzz", the first and longest running affiliate marketing podcast in the industry (since 2003). Google+ James Martell

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{ 9 Responses }

  1. Ed Corona says:
    Paypal and Stripe are becoming much more strict and selective. There are several private companies that do a good job with FinTech and High Risk that are becoming more desirable.
  2. Mike says:
    You are right PayPal is quite secure but not famous in Asian countries compare to European countries and other western countries. Now every country got their own payment gate way but not sure how secure they are. Thanks for sharing your knowledge with us.
  3. Stanley Rao says:
    paypal is the best of all which only leads to security but also on the people working there
  4. Samuel says:
    The problem i am having with this paypal is inability to reach some of my clients in African countries like Nigeria. I love the security rotation in making it hard to be hacked.
    • Michelle says:
      I have heard the same thing about clients overseas. Makes things tough.
  5. Mark says:
    @James I believe that phishing scams have increased in recent years. Having been the target of several recently, I am starting to see that they are getting more and more elaborate. The latest I have dicovered actually involves sending real money. Go figure. Great article. Mark
  6. Jon says:
    I am in the process of setting up a merchant account for my new business and it is good to know that Paypal is taking all steps to keep fraud at bay.
  7. Pauline R says:
    I have been using PayPal for the last 8 years and I must say they have a very impressive security.
  8. Bird Deterrent says:
    With all the hacking attacks out there its reassuring to know that PayPal is strongly focused on security. 2 thousand people working on encryption alone is pretty impressive

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