A Short Guide to Using Paypal

This is intended for those new to Paypal, but I've found that many longtime PayPal users are making the mistakes discussed here. And the same advice holds for any online payment or financial service--you can into trouble the same way at banks, credit card sites, and merchant sites.

Paypal itself is quite safe and reliable. People have gotten into trouble by being tricked into divulging their information to fake Paypal sites and by failing to keep their own information secure. However, it's quite easy to avoid all these dangers.

  1. The most common dangers are links that take you to fake Paypal sites and links that take you to the real Paypal site but allow a third party to spy on everything you do there. Fortunately, you can easily to avoid these risks. Even if the mail and link look legit, they probably aren't. Instead, go to Paypal the first time by typing http://www.paypal.com into the address bar of your browser. You can then Bookmark the address (in Firefox and other browsers) or add it to your Favorites list (Internet Explorer). If you ever receive an email from Paypal with a special offer or any sort of alert or information (including a Paypal invoice), DON'T click on any links in it. If it's really from Paypal, you'll be able to get the same offer or information by going to the Paypal site yourself (by typing the URL above or by using the Bookmark or Favorite you created when you visited the site before) and logging in to your account.Never click on a link to Paypal in any email you receive.

  2. Don't access Paypal or send any financial or private info on an insecure computer or network. That would be any public or work computer or network, or any unsecured wireless network. Two things: The people in your IT dept. have access to every bit of personal and financial info that passes through your work computer--most are, of course, completely honest, but in a recent confidential poll a frightening percentage admitted to snooping on other employees' and bosses' data and a third or more admitted to inadequate security practices that would let others do so. If you've set up your home wireless network yourself and you're not knowledgable and experienced in computer security, it's probably quite easy to spy on or break into your network (and if the cable or phone company or computer store guy set it up for you, better hope he's honest). Am I paranoid? Yes. Is that a bad thing? Well, I've been managing my finances over the web for over ten years, including running this business, and I haven't lost a single yen in all that time.

  3. Do NOT use the same password you use for your email account for Paypal. Paypal uses your email address as your username, so if you've used the same password for both and someone breaks into your email account, she'll have both your username and password. Email accounts generally have much lower security than financial sites, and on top of that we users tend to be much less careful about them.

To use Paypal, simply go to their site, as I've described above, and follow the instructions there for setting up an account and sending payment. If you haven't done so already, you'll have to verify your account and, if you want to use a credit card, confirm the credit card--PayPal will guide you through these simple procedures (they take a day or two). When you're ready to pay, click the "Send Money" tab, enter the amount and currency of the payment and, for the payee, enter the email address I've given you. Depending on what country you're from, you may also have the options of paying by direct withdrawal from your bank account and paying by eCheck from your bank account (again, if those options are available to you, PayPal will guide you through them).

Why do I use PayPal? As both a customer and a merchant, I've found that PayPal is far more reliable and secure than other credit card processors available to a small business in Japan. They've also got better customer service and dispute resolution than any other payment processor. Finally, PayPal is usually less expensive for the customer. PayPalcharges less for paying from credit cards and bank accounts outside of Japan than the regular services; most bank credit cards charge fees ranging from 2.5% to 4% on top of the usual credit card exchange rate for using the card outside of your home country, whereas PayPal charges a 1.9% fee for the currency conversion (you enter the payment amount in yen, and PayPal charges your card or bank account in its native currency--dollars, pounds, euros, baht, dong, etc.).

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