Is PayPal secure? How the service protects your transactions, credit card data, and more

• PayPal is a highly secure financial service, backed with some of the best end-to-end encryption available.
• You should also make sure to enable two-factor authentication, and delete any unused bank accounts or email addresses.
• Even with all this security, remember that no online service is immune to hacking or theft.
• Visit Insider’s Tech Reference library for more stories.

PayPal got its start in 1998 and is used by hundreds of millions of people. It’s considered one of the safest ways to conduct financial transactions online, potentially even more secure than using a credit card. 

How PayPal secures your information

“PayPal is an online payments system. Period. PayPal is laser-focused on payments,” said Monica Eaton-Cardone, COO at Chargebacks911, a platform that manages chargeback fraud.

In other words, PayPal focuses all their attention on making sure that every transaction you make through the service is as smooth and secure as possible.

The service automatically encrypts all transactions using secure sockets layer (SSL) protocol technology with 128-bit encryption. PayPal also performs server checks to ensure customers are using an approved browser (supporting SSL 3.0 or higher) for web-based transactions. 

Moreover, PayPal has added security features that go beyond technology like SSL and encryption. Tom Kelly, president and CEO of digital privacy protection platform IDX, said that PayPal stores all their data “in a single online vault system, which is much safer” than how credit card data can be stored in multiple locations.

PayPal offers a strong purchase protection program for buyers, and follows the Payment Card Industry Data Security Standard (PCI DSS), a set of standards also followed by credit card companies to secure user data and protect against theft and fraud.

It's important to note that PayPal acts as a secure intermediary, never exposing credit card numbers or bank account information during a transaction, which can happen if you use your credit card on other sites. 

How to protect yourself from any PayPal vulnerabilities

Monica Eaton-Cardone warned that no service is completely secure, though. "Even though you're well-protected from the other party, you're not immune to hacking, theft or fraud. If you make careless errors, that can lead to your PayPal account being compromised. And PayPal itself isn't infallible: They've frozen accounts by accident." 

In short, most vulnerabilities come from users accidentally exposing their username and password to hackers. Traditional scams like phishing attacks remain a risk that people need to be wary of. 

"Using two-factor authentication along with a strong password is critical," Tom Kelly advised. 

And because you can link PayPal to other accounts, devices, and email addresses, unused and forgotten links are a risk vector for your PayPal account.

Rob Shavell, co-founder and CEO of the online privacy company Abine, said, "Delete unused accounts and accounts associated with old email addresses. People often forget that they may have linked their inactive PayPal account to a still-active funding source. It's best to close out the account to ensure no one else accesses it."

How to remove your debit or credit card from PayPal in 5 simple stepsHow to find your PayPal account and routing numbers to set up direct deposit, if you're eligible to use the featureYou can't delete your PayPal history without deleting your account as well - here's how to do itHow to change your PayPal password to keep your account secure, or reset the password if you've forgotten it