Although the world has been on a sort of pause due to the pandemic, a quiet debate has gone on in payment processing circles for the last 6 to 9 months regarding whether PayPal, and other services like it, are truly safe ways to transfer money to family, friends and vendors. Naturally, this has caught the attention of those in the cryptocurrency community who’ve wondered for years why more people haven’t embraced the safety and convenience of buying and selling things using Bitcoin.
What’s Wrong with PayPal?
In February 2020, a report by CyberNews found that PayPal had been the victim of an authentication hack that allowed criminals to gain access to the credentials necessary for users to access their accounts. A secondary report followed only weeks later to reveal that PayPal login credentials were listed for sale on the dark web for a few dollars apiece.
PayPal officials responded to Zak Doffman, a Forbes contributor, that their internal investigation into the matter showed that user accounts weren’t at risk after the hack, and that CyberNews made claims the company referred to as “inaccurate and misleading.”
What about Venmo and Zelle?
While Venmo and Zelle have thus far escaped the problems PayPal finds itself in, the lack of accountability demonstrated by these money-moving giants remains a cause for concern. Scott Augenbaum, a cyber security expert and former FBI agent, has gone so far as to say that Venmo and similar apps lack the protection consumers are used to receiving from their banks and credit card companies, meaning that Venmo would bear no responsibility should money be stolen from the account.
As for Zelle, money expert Clark Howard has stated that banks have been pushing their customers to use this money-sending app because it shifts responsibility for accidental payments, incorrect payment amounts and fraud from the bank to the account holder. Howard also cautioned consumers by saying, “If they get scammed, there’s no way to reclaim the money.”
How is Bitcoin Better?
Perhaps the most obvious advantage that Bitcoin has over money-moving apps is that Bitcoin ATMs allow you to purchase Bitcoin to add to your digital wallet using cash. Services like PayPal, on the other hand, generally require you to link up your checking account. This link may feel convenient, but it ultimately puts every penny (plus some) in your bank account at risk should your PayPal account credentials be compromised.
For many people who don’t have a bank account or credit card, transferring cash can be expensive. Using a Bitcoin ATM to send cash is an easy, low-fee way to do it. And it’s more secure than other methods.
Other money-moving services, in an effort to make themselves more user-friendly, typically link to your email and/or cell number in addition to your bank account. This is a sharp contrast to Bitcoin, where your balance is kept in a digital wallet with a unique wallet address people must use to send Bitcoin to you. This helps to protect you by giving hackers fewer data points to use—especially if you’ve been diligent about keeping your digital wallet address private.
It also bears mention that, while PayPal has already potentially put consumer accounts at risk during its authentication hack, we pride ourselves on protecting your privacy while maintaining an entirely secure network for our Bitcoin users.