Watchdog: PayPal can say it’s “safer” than credit cards

PayPal has won the right to call its online payment service “safer” than the alternatives – despite the advertising industry watchdog saying it was no more secure than other methods.

Watchdog: PayPal can say it's

A complaint filed with the Advertising Standards Authority said the online payment service’s marketing claim to be “safer” than using credit or debit cards for web shopping wasn’t true.

PayPal argued that the “safer” claim was based on how it stored users’ payment details, so they didn’t have to share credit or debit card details with each and every retailer they purchased from.

The complainant – an employee of online payment rival – said the recent arrival of the “Verified by Visa” programme meant card payments were now “less dangerous than it used to be”.

But PayPal noted that the verification system wasn’t in use across all retailers, and still required users to hand over their details.

“PayPal argued that ‘Verified by Visa’ primarily offered protection for the seller, by making it less likely that a credit or debit card was being used fraudulently, thereby reducing the possibility of the merchant suffering liability for chargeback claims,” the ASA said.


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The watchdog didn’t agree that PayPal was safer than using credit cards for online shopping, saying it “offered their customers an equivalent, albeit not identical, level of protection from fraudulent access to or use of their accounts.”

Despite that conclusion, the ASA said PayPal could continue to claim it was “safer”, because it offered a unique alternative by letting users keep control of their payment details.

“We considered it was reasonable for PayPal to claim that PayPal was ‘safer’ on the basis that they offered a recognisable safety feature which was not embodied in those other secure online payment mechanisms,” the watchdog said.

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