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Online payment methods, are there significant upsides or downsides of one vs another?
Specifically this week I have to choose whether to create an account with paypal, cashapp or venmo but I am also interested in a broader discussion including other apps. Any advice or information would be welcome.
It doesn't feel like credit card fraud (having your credit card number stolen from entering it online) is much of an issue as it used to be. For me (anecdotally), it is often more about wanting some more control after you give out your credit card number.
Free trials, or low cost trials often ask for your credit card up front so that they can charge you after "X" number of days when the trial ends. If you forget to cancel, or they make cancelling hard (by making you call, hiding the option, or generally tricking you with dark patterns, it can be very frustrating.
Cashapp, Venmo, and PayPal don't really address this at all, but but there are other tools like Privacy.com that let you create virtual credit cards that you link directly to your bank account where you can control what merchants it's used with and set spending limits. I haven't used it in awhile but I also know Do Not Pay had a virtual card option as well that worked similarly.
Not exactly on topic but thought it was relevant to this discussion for paying for things online.
I used to take calls for the Daily Mail. We had one such company run ads on our website and advertise a skin cream called Replennage for £2.95 postage. What they buried deep within their T&Cs was that you were signing up for a fourteen day free trial and after this, your card would be billed £79.99 a fortnight. The few lucky ones had their card companies block the charges and alert them, but most found out after having hundreds wrung out of their account.
Replennage calls were some of the worst and most frustrating I ever took while working there, and I dealt with some really fucking toxic customers in my tenure. It's up there with the Lego promotions we used to run, where they'd give participating retailers little to no stock and then pass the burden of handling those complaints down to us.
Do not underestimate the ability of a Daily Mail reader to go full Karen on you because your company refuses to take responsibility for the ads they choose to allow.
That call centre job was so horrific that it made me drop my hours and study towards an accountancy qualification. Glad I got out of that industry.
Some credit cards offer this directly now as well.
I can create virtual card numbers with my ' one card and set spending limits or just wipe the number after.
Fraud isn't as bad as it used to be, but making it difficult to cancel services is at record highs.
I have the original capital one venture card that I've had since 2012. They offer this. It's great, I am able to generate a card for one time purchases due specific websites all using a browser plugin.
My wife has had her credit card info stolen twice.
She never buys online. I get the honor of making all online payments.
For the longest time, I had no choice but to give my credit card directly to consumer portals.
I have never noticed fraudulent credit card activity.
Now there are all these great options.
Paypal seems the most prevalent to me. It is almost everywhere. Downsides is I can't use my Yubikey to 2FA. It has a unique email and password, and I never noticed a problem.
If you are in the Apple ecosystem, their credit card lets you change the number after each purchase. Great for subscriptions you don't want to continue, but might be a hassle to cancel.
At some point American Express generated a "virtual card" for me that I can use for online payments. The goal appears to be to isolate my real card in order to prevent fraud, but not require use of a third party like PayPal. I don't understand how it works, but it seems to be an analog for my real card without using my card number. Entering it into a form, it's the same as any other card, with a number, expiration date, and CVV.
Yes, generating a different credit card number for each vendor seems like a good way to do it. Looks like it’s available from multiple credit card issuers.
This does require some kind of browser integration to make it convenient, though, much like using a password manager.
I'm OK giving out my card number directly. I monitor my charges every few days and the few times I've seen something wrong my card issuer has credited the money back very quickly.
I have PayPal as I used to use it for eBay payments for years. Sometimes I'll pay with that but it's out of laziness (no need to create an account for the store).
I have all three. I don't know if there are technical reasons that one is best. I think it depends on your use-case.
If your use is "transfer money between friends," there is little difference. They all do that fine.
Some (many?) small to medium-sized organizations/businesses accept PayPal as an alternative to cash, debit/credit, check, or ACH. I find that some small retail merchants specifically take Venmo or Cashapp. It varies. For business-to-business transactions, they rarely accept digital wallets of any kind (they want ACH or a check), though if it's any of them, it'll be PayPal. For refunds from a business, PayPal seems more common than Venmo or Cashapp, though I think many/most institutions still prefer a debit/credit card or check.
PayPal is probably the most established in the financial ecosystem, at least where I live. Anecdotally it seems to have more brand recognition and trust than the others. If you need a payment gateway for your website, BrainTree (owned by PayPal) is fairly popular though there are many alternatives. I don't know if Venmo or Cashapp have that kind of infrastructure, or own companies that do. You can even buy crypto on PayPal (though I wouldn't recommend it).
I am interested in hearing other perspectives on this as I live in a bubble.
I use only PayPal so I can use my credit card directly. I don't use cash app or venmo since you're effectively using them as a bank without any of the protections of a bank and they have the ability to debit your account directly. No thanks. I know PayPal has this ability, but the ability to use the credit card is a better option IMO.
You might want to say where you live, since this varies quite a bit between countries. Is this a discussion of US options?
It is about the US for me. If people elsewhere want to piggyback on the discussion for their own purposes, that's fine with me.
One of the differences about banking in Canada is that all of our major banks have e-transfers, that is, you can transfer money to anyone just with your bank website/app and their email address. It's usually free, instant and ultimately efficient, so there's very little use of third party apps for most transactions.
Are there any tax implications of using (accepting) third party payment vendors? I remember reading that the IRS has a new $600 beyond which you will pay taxes on money accepted via third party apps. Not sure how pervasive that is in case you're just transferring money between friends