Paypal review: Should you ditch it?

hi i'm andy webb from be clever with your cash.com for those of you who don't know me i'm a money journalist blogger an all-round bit of a money geek helping you find the ways to make the most from your money today i want to talk to you about a way that most of us have paid at least once if not more frequently and it's paypal i'm gonna have a look at the pros and cons of using this payment system and whether you should bother having it anymore particularly in the light of two big developments number one if you have what's called an inactive account there's going to be a new charge applied to your account i'll talk more about that later but also that requirement to have paypal for selling on ebay that's also going so at some point in 2021 if you're selling on ebay you won't have to have paypal so with that in life is this something you should stick with or is it something you should ditch now if you're not quite sure what paypal is a quick summary it basically is a digital wallet now this is a digital wallet before we had things like google pay and apple pay and all that kind of stuff so you have an account an online account and you connect it to your bank account or your credit cards or your debit cards and that's how you use it to pay so you could go to any kind of you know many many online retailers you've got your options to pay by your credit card your debit card but you've also often got that option for paypal and i say this is before we had all these extra things coming along that was one of the only kind of extra way you could pay and it would you click on that make your payment and it would log into your paypal account and then it would bring the money you could choose whether you wanted to put it from your bank account or from one of your connected cards or from any money that might be sitting in that paypal account and then that payment would go through you could also use it to pay people so rather than paying retailers it could be paying a mate you owe them some money or you want to send them some money for their birthday or something family member if they've got a paypal account you could transfer the money over to them and likewise if they owed you some cash maybe you've been out for a meal together or been away on a holiday and someone owed you a chunk of money you could send that request through via paypal to their account and they could just click a few buttons and send you the money back from their connected bank account or connected cards now this was okay the only way of doing that until recently you can do that in lots of other ways right now but that's essentially the three ways as a personal paypal account that you're likely to use it or have used it there's also a business account but i'm not going to go into details on that this is focused on you as an individual as a punter using it for your own spending so that's basically what it is how it works let's get into those pros there's positive things that i think paypal does pretty well that are kind of good reasons to use it number one is that security measure i mentioned about how when you're shopping online you pay via your paypal account to a connected card why would you do that if you could pay by your card well it is security essentially if you are going to a website you're not so sure about what it is or maybe you're not comfortable shopping online full stop and you don't want to put your bank card details into this website just in case hackers were to get hold of it or something like that or it's a dodgy website in the first place if you use your paypal account all you're doing is you're logging into paypal that has its own security login measures you can put in double authentication there to make sure you're using the proper paypal login and not some sort of dodgy copy and then you use it that underlying card that website that you're paying for you're shopping from will never see those card details so it's a really good way to help protect your purchases now it's also a very very very fast way to pay and a very convenient way to pay i don't know about you sometimes if i'm sitting on the sofa i've got my laptop i'm shopping for something i haven't got my wallet on me i haven't got my cards on me so i can just log in pay right here and sort of get up and get the wallet okay i appreciate it might only be sort of 10 feet away but it's still kind of a fast and convenient way to pay so it's another big positive for using paypal although i should say obviously there are more services doing a similar thing now so you might not have to use paypal for that you might be able to use google pay or you might have your card details stored on your computer i personally don't do that but you can do that as well now one of the main reasons that i tend to use paypal if i'm shopping is so i can use my american express credit card now i love amex if you haven't already checked out my video or review the best of the two cash back cards do check that out essentially i pay with an american express cash back credit card as much as i can to earn money back on my purchases most places will take american express nowadays that list of places that don't take it is getting smaller and smaller but you still will find some retailers who only take visa and mastercard so to still get my cash back if there's a paypal option i often tend to click that paypal option and pay pay with paypal and fund that payment with amex because basically what you're doing when you're using paypal is you are paying paypal and paypal is playing the retailer okay so that's a nice little trick nice little hack to still earn cashback on your points via amex when the website doesn't take amex i will get down to the flip side of that which is a negative point for doing exactly that same thing but i'll get to that in a minute now something you might not know about paypal is that it has its own offers section now these come and go a lot of time they aren't up to much but every now and again you'll see something which is pretty good so at the time of filming this uh there's an offer where if you spend 30 pounds at three different retailers they're gonna be participating in retailers only a short small number of retailers but some big ones on there like asos and waterstones they give you 20 pounds credit back to your paypal account these things come and go as i say they don't last all year round but it's worth having a look at that if you didn't know existed head on to the offers tab in your account it's easiest to find that if you log in on a browser rather than your phone but it's there all the same see what's there see if you're eligible for it you often have to activate the offer to take advantage of it but it's a nice way to save a little bit more something else which i only recently discovered exists on paypal is something called moneypool and i really like this idea this essentially is a way to crowdfund for friends and family now this would have been perfect when we got married because rather than ask for gifts we ask people to contribute towards our honeymoon now that meant actually then putting in checks or cash in their cards if they chose to do that with something like a money pool it'd be very easy look here's the link here you can put in the amount money you would like to give you can make it anonymous you can put in a little name and a message if you want to it's basically a bit like if you when you give fundraising on you know virgin giving or just giving something like that but it's to help you raise money for something like that or potentially maybe you're going away as a group for a holiday group of mates going away and you want to have a little kitty fund you could all put if you wanted transfer in 50 quid into that kitty and then you've got that amount of money you know is there at the end which you're going to split for that cost something like that i think it's a really great idea there are no charges to set it up there are no charges to put money in and there's no charge to use the cash so that's the money pool that's another really good benefit and there's one more thing which i think is worth considering about paypal which we haven't got in the uk just yet i'm hoping we'll see it at some point in 2021 this is a virtual car they're calling it paypal key now it's been launching very slowly in america rolling out to certain people they have to sort of find out if they've been given access to early access to it yet so it isn't even fully released in america yet but essentially a virtual card is a way that you can use your paypal even if the website doesn't accept paypal essentially it creates a a long card number and the expiry date and then it will three digits that you need to authorize any card payment and this is basically one that you can change at any time so if again those dodgy websites if you don't want to put your card details in and it doesn't accept the normal paypal you could get this virtual card put that payment details in and again your money is protected they're not going to get access to it and you can change those details again you can stop it at any point so if something does go wrong if some reason those details are hacked no money is going to be taken from you so that hasn't come out yet in the uk i think it's a nice innovation normally you only see these things in premium bank accounts monzo premium for example you get some of these virtual cards uh but this is a kind of thing a nice way to get hold of this and use this feature so fingers crossed we'll see that in the not too distant future so they're the key positive they're the main good reasons for using paypal but what about those negatives what about the cons now the biggest one here i'm briefly alluded to it before if you are using paypal you are losing access to one of the biggest consumer right protections that we have here in the uk you've probably heard of section 75 already this is section 75 of the consumer credit act and basically what this means if you're using a credit card to make a payment for something which costs more than 100 pounds there's an upper cap too but most of us we're really focused on that kind of just over 100 quid even if you don't pay the 400 quid you could pay just a penny or a pound or a tenner of that total but even just part of it what it makes is that credit card company equally liable for any losses or problems that might occur as the provider as the retailer now this is fantastic and this is enshrined in law okay so this is absolutely if you can't let's say a company goes bust you haven't got the service that you wanted the thing hasn't been delivered or the i don't know the accommodation you were going to use it's shut down so you can't go for your holiday section 75 will mean the credit card company will give you that money back it is fantastic okay it's really really really good bit of legislation that helps protect us as consumers you don't get that with paypal i mentioned before how when you're using paypal you are paying paypal and paypal is paying the supplier the retailer whoever it is what that therefore means is you are breaking that link between you and the retailer and that's so important for section 75. now it's all a bit of gray areas here potentially there's a chance you might be able to make a claim if that happened for you but if you are buying something where you think there's potentially a risk that something could go wrong you're not sure about the website you've heard maybe they're in danger of going bust or whatever it might be or it's a lot of money then i would just pay with the credit card and avoid paypal completely now obviously if it's less than 100 quid section 75 doesn't exist you can look at something called chargeback and you can still make a chargeback claim via paypal when paypal also has its own buyer protection service um which will give you back the money and it will give you back uh the delivery cost as well again if something has gone wrong you have to put in a claim and it looks at it if it's a legitimate thing that shouldn't be bad it seems to have quite good ratings in terms of coming back to you however it's not as strong when it comes down to fraud so for example you probably heard these horror stories you buy something on ebay something quite expensive and you open it up when it arrives and rather it being that i don't know what it is that playstation 5 actually what you've got inside is a couple of bricks okay so the weight is the same the box is the right size but you have not got what you paid for now that's an extreme example although i did hear rumors of that happening when the playstation 5 launched if the seller has got proof of selling which could just be the proof that they posted it not that what was in there proof they posted something then you might miss out so scammers it doesn't it's not as strong as the other protections that are available to you so just bear that in mind that we are protections but you lose that best protection out there now sticking with scammers they love paypal i don't know about you but if i get some spam email in my inbox right well actually my filter's pretty good so often does go to that spam folder but more than any other kind of brand you see ones like for tv license quite a lot i've seen them for amazon quite a lot but one of the things i see more than anything is from paypal or people pretending to be from paypal they love it and basically two things they're trying to do here they're over trying to get you to uh share your login details so they can then hack your uh paypal account and steal the money from it or they're gonna try and get you to send some money to another address as a test or whatever it might be now for a start up most time if that kind of stuff thing comes along you should be wary about it i know people panic and stuff but most time if it's something like that be a bit wary i mean they might try and be a bit more subtle about it and say hey log in for this login for that i re i mean i do this with any email i get but i particularly pay attention to anything that says it's from paypal you can look for the obvious sign so it doesn't say dear customer apparently with paypal if they always address you by your name right you can look for spelling mistakes some sort of grammatical errors that would suggest this isn't the real thing but the easiest way the best way to do this is to uh hover over and click on the sender's email address now i haven't got a paypal scam email on me right now but i've got this one from amazon but not from amazon and you'll see this is what you do if you click if you're on your tab just hover over that uh that name that was sent from click on there open it up and it'll tell you it would give you the actual underlying email address if you want a desktop it's a similar thing just double click on it and it'll pop up and you can see that is not a real email address you know it's going to come from paypal.com that's what you would expect an email from paypal to come from if it's not that it is not from paypal okay but be really extra careful with scammers and paypal if you've got an account you know you think there's a good chance you might look at one of these and think it is legitimate most of the time they aren't now i think we're going to see a lot more of these scammer emails attempt to try and get into your account because of something that paypal is introducing in december 2020 and basically it's an inactivity fee so if you haven't used your paypal account to send money receive money or make a payment in a 12-month period or if you just haven't even logged in for 12 months then they will charge you a nine pound fee what's gonna be 12 pounds sounds like it's now gonna be down to nine pounds right now that money that fee they'll charge you will come from the money that's sitting in the account they won't take it from your connected bank account or connected debit card um so if you have let's say there's 15 quid in that account they'll take nine pounds away from that but what they won't do is take more than you have so if you only have four pounds in there that only take four pounds and if you have nothing well they won't take anything at all so there are a few very simple things you can do to make sure you avoid this new fee one of them just log in once a year put a note in your diary to make sure you've done this okay every 12 months you've logged in you won't get charged the fee but also don't have any money sitting in there now obviously you might not realize that sometimes a refund might come through a payment might come through and you might not realize the cash is there but if you've got no cash in there you can't get charged so do those two things now the reason i think this might encourage uh scammers over the sort of come in months and years is because paper will email you 60 days and then 30 days before that charge will be levied to you for an inactive account so if you're getting these emails and you know these emails might come well then the scammers might also test that so people like me telling you about this that might make you more aware and more likely to check an email that comes through that says something similar so just double check that it is a legitimate paypal email before you actually click anything okay so just be really careful about that but there's no point paying that fee or even part of that fee because you don't have to just log in once a month once a year sorry you can also if you don't want if you know you're not going to use paypal at all you can close your account down completely now another way that scammers might try and take advantage of you on paypal is when you're asked to send money so there are two ways that you can send money you can pay money to a friend talked about that earlier on send the money to them nice and simple no fees no charges or you can pay for a service or pay a business when you do that the business the person you're paying will have to pay fees to paypal so the money system they won't get all of it some of that will go to paypal now this becomes a problem because sometimes you get businesses saying to you look rather than uh doing that if you don't mind paying us as a friend sending the money it won't you know we'll knock a little bit of money off we'll save you a bit of cash because it means we won't have to pay the fees so it's win-win for both of us and you might think yeah why not what's the harm in doing that the problem is if you pay someone as a friend there is no paypal buyer protection you don't have any of their additional rights to uh seek a refund if something gone wrong and what you might find is that this is a scammer they are actually don't actually have anything to sell you at all now you might see this you know on ebay or maybe also like airbnb and you're chatting to the seller and they say let's take it offline and we do it privately be really aware that if you do that then you have no protections at all for your payments so if you're paying a business just always you say you're going to pay them via that fee and if it costs them a bit of money it cost them a bit of money but at least you'll have that extra protection now a couple more things that i'm not a fan of with paypal one of them it's very difficult to use it in shops so you can't really rely on it i mean occasionally you'll see a retailer that will take it and if they do it's quite smart they produce a little uh qr code that you scan with a paypal app and then you can just pay like that in theory it's very quick but how much faster is that than just getting out your card and tapping it okay so that's a bit of a wasted thing it's not a bad thing but it's a waste don't expect to be able to use it on the high street this is really much more about an online payment method it's also not a great way to send money in other currencies the conversion rate is not fantastic when i've done this before like buying things and i had to send money across the rate has not been as good now i've not looked into this in detail but if you are thinking of using a service to send money to someone abroad from you know converting from pounds into dollars or euros or yen or whatever it might be do your research look at all the different platforms that are out there because i bet they're going to be a better option than using paypal and finally the last thing i'm not really a fan of with paypal is how much they push credit how easy it is for you to borrow now you'll probably see this quite often when you're at checkout you've got your paypal but also underneath it you say paypal credit and often it will try and push you to zero percent now i'm not saying that's necessarily a bad thing yeah naught percent credit can be useful for big expensive purchases that you need to spread the cost out so for example getting a new iphone a lot of people aren't gonna have the cash to buy that out right but if you get naught percent whether that's paypal whether it's direct with apple whether it's on a 90 purchase credit card and you spread that out over a couple of years that can be a good thing but i've seen uh situations here exams where people have just gone all right yeah i'll take out that credit and i do and it mounts up and it mounts up and it mounts up for some reason they think of it a little bit differently than they would credit card debt or other debt so i'm not a fan of that how easy they make it just with a few clicks to get credit on a purchase without having really considered what it means and that's going to get worse because paypal are going to be launching their own buy now pay later service like klanna they're paying free service now these are they're not really regulated i'm not a fan of these at all time from probably a video another time to talk about those in detail but that's going to make it even easier for you to use paypal uh to pay for something on credit and there won't be any credit checks or anything like that so again i'm not a fan of how easy they make it uh to get credit in the first place this is gonna make it even easier so that's a long list of negatives much longer than the positives that i sort of outlined so does that suggest that actually paypal is bad and you shouldn't be using it well you know what not really because those negatives they're important for you to know about them it's important you understand where you could get caught out or potentially could miss out and if you avoid those you take the proper uh precautions to make sure you don't open the scammers emails you make sure that if something costs more than 100 pounds you use a credit card separately not via paypal uh then most those negatives are getting wiped out really i think paypal is just another one of those options you've got it's never going to be something you use for everything partly because it's rubbish for using it in shops but also you won't always need to but it's nice to have it there for that extra measure of security for that convenience for things like the money pool which i really like excited about this virtual car feature uh when if and when it comes to the uk so i think it's well worth having an account it's worth having it something that you've got an option to use it just make sure if you do have it but don't use it very often you don't get hit by that new fee now if you want more information about any of this i have got a full article review over on the blog i will link to it up here so you can click through to it and if you have found this useful if you think i've saved you money or helped you better manage your money please hit that like button and then hit subscribe and notification bell as well it all makes a huge amount of difference to make sure for start you don't miss any of these videos that i do in the future but helps me grow the channel as well and reach more people until next time cheers and here are a couple more videos you might find interesting you

Channel: Be Clever With Your Cash

Views: 53,577

Keywords: paypal, Paypal review, Paypay review 2021, Paypal fees, paypal inactive, Paypal uk, Paypal money pools, Paypal Key, Is paypal safe, What is paypal, how paypal works, how paypal works on ebay, how paypal scams work, Paypal scams, paypal discounts, Paypal review uk, Inactive paypal charge, How to use paypal, paypal buyer protection, paypal account, what is paypal, what is paypal and how does it work, what is paypal key, what is paypal money pool, Fintech uk, fintech review

Id: uGf_jScts_4

Length: 20min 3sec (1203 seconds)

Published: Wed Dec 09 2020