Safely paying online

Sometime between then and now, while I haven’t been looking, South Africans are now able to get PayPal accounts.

A couple of years ago I wanted to buy vintage postcards from the auction site Ebay for use as illustrations in my book on Durban. It didn’t take long to discover that most transactions on Ebay were concluded through its online payment facility called PayPal.

How PayPal works is that you first register with the organisation and enter your credit card and/or banking details which are linked to your e-mail address. You can then send funds to anyone with an e-mail address simply by logging in to PayPal and entering the other person’s e-mail address and the amount you want to send.

This takes all of a minute and the money is on its way to pay for whatever goods and services you’ve ordered. Next time the receiver logs into their account, they’ll get notification that payment has arrived and the amount will be reflected in their balance.

Funds are deducted from your PayPal balance, if you have one, to pay for things or your linked bank account is debited by that amount. Funds you receive can be kept as a positive balance in PayPal or withdrawn into one of your linked accounts whenever you need to.

Sending and withdrawing funds with a personal account is free as are most receipts but, depending on the source of the funds and whether foreign exchange is involved, there can be a nominal fee charged. You can upgrade your account for free to accept payment by credit cards and have the free use of PayPal’s shopping cart in your online shop.

The system is apparently very secure because you never have to type your banking details into any website other than PayPal’s and the merchant receives payment from PayPal without ever knowing anything except that he has been paid, and what the delivery address is.

PayPal made paying for stuff and receiving payments on Ebay so easy that that just about everyone has jumped onto the bandwagon and are using it. Some merchants are still accepting bank transfers and credit cards but most limit you to PayPal only.

PayPal sounded to me like just about the coolest thing I had ever heard of but there was a snag in that South Africans could not get accounts. With the help of friends overseas, I managed to buy the items I wanted and thought that it would be really great if I could get my own account.

Just the other day, I found out that South Africans can now get PayPal accounts and link them to a local credit card. When you buy something, the amount is deducted from your credit card and the system even tells you much it will be in rand.

The only major snag with PayPal, for us South Africans, is that you currently cannot withdraw the funds from your account into a local bank account.

I have already found my account very useful for paying for small items from overseas and I daresay I could use it to receive a payment if I had to. Any funds received would swell my PayPal balance and be used for making payments in future.

The fact that you couldn’t withdraw funds wouldn’t be so handy if you were a large online merchant, and that’s a great pity because it’s a way into e-commerce that is waaaaaaaay cheaper than any deal you can get locally.

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