Is It Safe to Link a Bank Account With PayPal?

PayPal is an online payment site with more than 130 million active accounts worldwide. It can be used to pay for online purchases, make charity donations, settle bills for business services and more. Although the site can make the process of making payments easier, some people are skeptical about using it and don’t want to link their bank account to it. However, linking a bank account to PayPal is safe as long as users keep proper checks and balances in place.

PayPal has the same level of fraud protection as a credit card and the site works to ensure that online payment is a secure process. Merchants only see your username and the amount you’ve paid and can't see your bank account information. The company emails you a receipt after each purchase to help safeguard your account. PayPal also reviews all user payments and will notify you if it notices any unusual deductions from your account based on your history.

However, if you receive an email from PayPal thanking you for a purchase you didn’t make, it’s important to log in to your account and report it. While the company requires you to report unauthorized activity within 60 days of the transaction, it’s best to do so immediately so investigators can get to the bottom of the issue quickly. Doing so can also keep you from being ripped off again; if a criminal has hacked into your account, you'll want to stop him before he can take more money. PayPal has a fraud resolution policy and will credit the missing funds to your account if it can’t resolve the situation within 10 days, or 20 for new customers, while they look into the problem.

PayPal asks each new user to verify their bank account. There are two ways to do so, either through random deposits or instant confirmation. If you choose the first option the company will make two small deposits into your account and you’ll be asked confirm their amounts. This process typically takes two to three days to complete. The second option offers a way to confirm your account in minutes, but you must share your banking username and password with the company. Though the company doesn't save your information, the process still makes some people nervous.

Because PayPal is such a popular payment method, thieves often try to take advantage of users. A common ploy is a phishing scheme, where a criminal sends PayPal users a fake email asking them to log in to their account. While those emails often look very realistic, you should never click on links included in them. Instead, go directly to the site to log in. It’s also advisable to review your PayPal statement at least once a month to make sure you authorized all transactions on your account. Other methods to ensure safe usage include keeping your computer's security up to date and avoiding the use of publicly accessible computers when logging in.