Given that society is moving increasingly towards a cashless system, more online payment methods are likely to emerge in the coming years. However, any competitors have to overcome the goodwill that PayPal has generated during years of being one of the most prominent electronic payment services. Paysafe is another modern payment method that is looking to challenge PayPal for its share of the market.
How do they work?
PayPal needs little introduction. PayPal Holdings ranked as 222 on the Fortune 500 in 2018, a result of having attracted a record number of new accounts and growing its revenue by 21% to an impressive $13 billion. The service allows users to transfer funds easily to businesses or individuals, while money can be stored as a PayPal balance to be spent at the user’s convenience.
There is a range of distinctive payment services available under the umbrella of the Paysafe Group. Neteller is a digital wallet that allows users to transfer funds between friends and businesses with ease, while the paysafecard is a prepaid option that allows for quick online payments without requiring bank account information.
Where can they be used?
Over the past several years, Paysafe has evolved from a more niche option, usually reserved for gambling platforms, into PayPal’s most serious rival in the global market for online payments. The list of sites that allow the use of paysafecard is impressively diverse, spanning from online dating websites to VoIP messaging services. Neteller is accepted at a range of merchants, with a heavy emphasis on use in the forex industry.
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Paysafe’s presence in the gambling industry remains strong, with Neteller an attractive option at online casinos due to its ability to facilitate fast deposits and withdrawals. There was a time where Paysafe services would have been the only alternative to debit and credit card payments at these sites, but this is beginning to change. The Betway casino offers both Neteller and PayPal as payment options, highlighting PayPal’s desire to branch out beyond e-commerce.
PayPal was the main payment method on eBay for many years, although in 2018 the BBC reported that eBay was dropping PayPal as their primary payment method to lower processing costs for sellers. Meanwhile, PayPal users could be frustrated by the continued inability to use the service on Amazon, although Business Insider notes that there is a workaround. However, PayPal is still usable at an extensive range of websites, including huge companies such as Netflix and ASOS.
Are they safe?
There are inevitable privacy concerns that come with FinTech companies such as PayPal and Paysafe. However, PayPal and Paysafe are both used by brands trusted across the world. While that alone doesn’t make the services are completely secure, it does mean users can be confident that any issues can be resolved quickly. Problems can arise when moving away from bigger companies.
Many freemium apps use PayPal for in-app purchases, harvesting account data for underhand purposes. However, that is not necessarily a fault of PayPal, so users should deploy discretion when downloading apps or accessing websites for the first time. PayPal has been transparent in its use of personal data, with The Telegraph reporting on PayPal’s declaration that users’ data could be shared with over 600 external companies.
This openness at least lets users know where their data might end up, as opposed to companies surreptitiously sharing information. Paysafe’s commitment to data protection is similarly public, with Daniel Kornitzer telling Totally Gaming about how the new GDPR regulation can allow Paysafe to help companies enforce data protection rules.
Are they secure?
Neteller utilizes SSL encryption to keep payments secure, while a two-step authentication process can be added for extra peace of mind. The nature of the paysafecard means that user information is hidden from merchants and no bank or card details have to be entered. As with any service that requires a PIN or a password, phishing techniques can hijack any transactions. If that happens with a paysafecard, at least the bank account details remain safe.
PayPal offers a secure encryption process, although users should be careful that they are accessing the genuine PayPal gateway. Some scammers have created websites that use the PayPal logo to trick people into entering their account details, but users can combat this with vigilance and anti-virus software. PayPal’s Buyer Protection program could reimburse users if transactions go awry, which is what you would expect from a company of PayPal’s stature.
What’s the verdict?
PayPal is still the leading modern payment method, purely because it is the most commonly available. However, if users frequently access online gambling or forex websites, then the Paysafe options may be more attractive. Both can be trusted in terms of security and privacy, allowing for safe and efficient online transactions at a range of websites.