Is PayPal a Safe Bank Account?

History
PayPal was formed in December 1998 and is considered one of the leaders in global online payment. As of the second quarter of 2010, PayPal had more than 87 million active accounts and can be found in more than 190 markets. In the second quarter of 2010, PayPal's financial status showed that the corporate revenues were more than $800 million, having increased over 20 percent from the previous year.
Acquisition
The website eBay acquired PayPal in October 2002. Prior to the acquisition, PayPal had been used by more than half of all eBay users, as well as a competitive service that was known as Billpoint. There were a variety of other services, ranging from Citibank's c2it program to Western Union's Bidpay and Yahoo's PayDirect, but with the passage of time, the competition shut down.
Considerations
Since PayPal is not a bank and is not subject to federal oversight regulations, an users have little recourse in the event that PayPal chooses to freeze their account for any length of time. An online search using a term such as 'PayPal Problems' will pull up search engine listings of individuals who have had problems with getting payment from PayPal. It is important to note that many of these accounts are anecdotal and do not provide any documentation.
Litigation
In 2002, PayPal was brought to litigation on two separate occasions by two different individuals for a variety of reasons, many of which dealt with the way that PayPal resolved disputed charges. The two lawsuits were actually combined into a single class action lawsuit. In November 2003, an informal settlement was achieved, and the outcome was that PayPal agreed that it would change the way it handled and resolved disputes, in order to make them compliant with the Electronic Funds Transfer Act, which protects consumers who use the internet as a means of conducting business transactions. Prior to the settlement, consumers who had a dispute with PayPal had no recourse for resolution, as PayPal was not bound by any of the restrictions found in the EFTA.
Other Problems
Software programmers have had problems with PayPal in the past. Markus 'Notch' Persson, the developer of a software program called Minecraft, had a PayPal donation account set up. Whenever people purchased a game, they would donate money into his account. According to UK gaming Rock, Paper, Shotgun, when Persson attempted to withdraw money from his PayPal account, it was frozen by PayPal authorities due to alleged suspicious activity. Although it was determined that Persson's activities were legitimate, his funds were frozen for six months.

How to Add a Disclaimer to a PayPal Invoice

1. Visit paypal.com and use your sign-in information to sign into your account. Click the 'Request Money' tab at the top of the page.
2. Click 'Create an Invoice' to start a new invoice. If you've already created an invoice for a particular purchase, select it from the list of invoices listed under 'Invoice Date.'
3. Verify all of the information on the invoice is correct. PayPal automatically fills in your name and address according to your PayPal account information. Fill in the buyer's name and address, the item and the price.
4. Add terms and conditions into the box labeled 'Terms and Conditions.' You'll want to have information about a return policy or your shipping policy listed in your terms and conditions.
5. Type any other disclaimer information into the box labeled 'Note to Recipient.' This gives you space to add notes about the condition of the item and anything you may have discussed during the sale of the item. This ensures clear communication should there be a dispute later on.
6. Save the invoice to send or save the invoice as a template if you plan to sell under the same terms and conditions in the future.

Why Do PayPal Payments Fail?

Zero Balance
A zero balance is the fastest way to have a payment rejected on PayPal. If you make the payment online, your balance is shown before you hit "Submit," so you know if there are enough funds available. You will get an instant failure if you attempt the transaction. The same goes for purchases using the PayPal debit card; if you don't have enough to cover it, the payment is not authorized.
No Backup Funding
When using the PayPal debit card to make purchases, you have the option to add backup funding. This protects you in the event there are not enough funds available in PayPal. The money is deducted from your bank account or debit/credit card, even when the balance shows "Zero." Click "Profile" and go to "My Money." Under "Debit and Credit Cards," click "Update." Click "Edit" to add a backup funding source.
Returned Check
If you have a backup funding source set up and the transaction fails, the e-check may have bounced. PayPal sends an electronic check to your bank account, and it takes 3 to 4 days for it to clear. When it is returned, PayPal takes the funds from your PayPal balance, if possible. You'll end up with a negative balance if you don't have enough in PayPal to cover the bounced check.
Negative Balance
Backup funding sources fail if you attempt to use the "Cash Back" option when making a purchase. In order to get cash back, your PayPal balance must be high enough to cover it. The only other time a funding source fails is if your PayPal account is negative, or the backup account is canceled.
Spending Limits
PayPal imposes limits on sending and receiving money. You can place certain limits for online spending, and limits for debit card use. For example, as of the date of publication, you can withdraw up to $400 daily from an ATM machine, and spend up to $1,000 a day using the PayPal MasterCard. You must verify one of your accounts and enter your Social Security number to receive a limit increase. Click "View Limits" on the "My Account" page to see the limits and begin the verification process.

How to Spot a Craigslist Scam

1. Type the words 'for local pick up only' and 'cash only' prominently in your ad--and make no exceptions. This drives away a good share of potential scammers.
2. Delete emails from potential buyers who have lengthy sob stories or complicated explanations of why they need to pay by check or money order. Anyone who says their 'secretary' will take care of the transaction because they are in a foreign country or are too busy as a famous archaeologist to make the purchase in person is most likely a fraud.
3. Be aware of scams involving fake checks or money orders. A good fake check or money order can pass through the bank's initial screening process--then, days later, you'll get penalized for trying to cash a counterfeit check. By then, the scammer will be long gone. This is why you want to make your transaction cash only.
4. Familiarize yourself with the Craigslist scam involving a shipper. The buyer will say the product will be picked up by a shipper--and usually also promises to wire you more money than the item actually costs. This is the most common Craigslist trick.
5. Notify the Federal Trade Commission of any attempted or successful scams by calling 877-FTC-HELP.

How to Charge by PayPal

Sign Up for PayPal
1. Go to the PayPal home page and click sign up. Enter your email address, mailing address, password, country and fill out a profile. Your password must contain at least eight characters and is case sensitive.
2. Enter several security questions and answers. Read and agree to the terms of agreement. You will also have to type a security word in a text box and then hit "Submit."
3. Open your email and look for a confirmation message. Follow the link in the email to confirm your account. Enter your password and your account is confirmed.
Adding Your Bank Account
4. Sign in to your PayPal account. In the “My Account” tab look for the “Profile” link, click it and then choose “Add or Edit a Bank Account.”
5. Enter your bank name, routing number, account number and any other information you are asked for.
6. Check for two deposits made into your bank account by PayPal. When the deposits post, sign back into PayPal. Under profile, look for a link to verify your bank account. Enter the amount of the deposits and to complete the setup of your bank account. You are now ready to add or remove funds using PayPal.
Adding Paypal Payment Buttons
7. Sign in to your PayPal account. Click on the “Merchant Services” tab. Choose the “Buy Now Button.”
8. Choose the “Accept Payments For” drop-down menu to “Products.” Next, choose “Create a Buy Now Button.”
9. Enter in the item information including your product's description and price. You will also add in shipping information. Click on “Create Button.”
10. Copy the HTML code that shows up in the next screen. Paste this code on your website where you want the button to appear.

How to Export on PayPal

1. Sign into your PayPal account at PayPal.com.
2. Click the 'History' link under the 'My Account' tab in the PayPal menu bar. This displays a history of your transactions on PayPal for the past month.
3. Edit the dates located next to the 'Balance' box to change the start and end dates for the transactions you want to view, then click 'Show.'
4. Click the 'CSV' link next to 'Download:' in the top-right corner of the transactions section. This exports your transactions into a CSV file and downloads the file to your PC.

How Can I Retrieve My PayPal Account Number?

1. Log in to your PayPal account to retrieve your merchant ID number if you have a premier or business account.
2. Click the 'Profile' tab.
3. View your merchant account ID number at the bottom of your profile page, if you have a premier or business account with PayPal.
4. Contact PayPal by phone if you continue to have problems getting your log in information.