PayPal’s entire brand is based on security. They emerged when the internet was a wild-west, to allow online citizens to make payments to vendors in good faith that they will not suffer negative consequences like scamming. As such, they have carried a reputation of security excellence into the much more regulated online landscape. They are a great case study of a company that has evolved its offering throughout the digital age while keeping its brand consistent. So, what features do they offer that give their users such trust?
PayPal Purchase Protection is at the core of its offering to users. When buyers pay with PayPal on any website, they are covered by purchase protection. This means that if the item is not what was described or if it doesn’t arrive, they will help the buyer get a refund in full. To qualify, they require a user’s account to not be in the red and require a dispute to be filed within 6 months of the purchase. They only protect buyers against certain purchases, and do not cover real estate, motorized vehicles, custom goods, industrial machinery, prepaid cards and anything bought in person but with a transaction that occurred over PayPal.
Although PayPal has some flaws, on the whole, it works reasonably well, partly because it may act as a deterrent to scammers.
Scam Awareness and Response
The deterrent effect of PayPal on scammers is due to PayPal’s attempt to educate users about popular scams and warning signs that they should avoid (e.g. a buyer refuses to talk on the phone; a buyer offers more money than you were asking for). It is also because if a scammer gets caught out and reported to PayPal, they can have their account blacklisted and know that PayPal has a tremendous amount of data on them, which they may hand over to police if it is necessary. This zero-tolerance policy combines with purchase protection to provide users with far greater peace of mind than they would typically have with online transactions, especially with smaller purchases.
Gambling is an area that PayPal takes a special interest in offering additional protection. They prohibit gambling transactions in areas where gambling is illegal but also require that a gambling merchant is approved by them first. This helps to protect the gambler against sites that might use less-than-legal marketing techniques to encourage gambling and take advantage of addictions. By law, gambling institutions need to uphold specific standards (including reminding users that gambling should be for fun and if it becomes a problem they should stop), as well as block accounts with activity from places where gambling is illegal. Therefore, gamblers have additional peace of mind when going through the limited list of PayPal Casinos to indulge in their recreation.
Lessons from the PayPal Case Study
If you take an interest in business, the PayPal security case study is an excellent example of how a company can offer a user-oriented service that excels in its niche with a combination of resource-heavy features (like purchase protection) and associated features, that require fewer resources but reinforce its brand and enhance the impact of the resource-heavy features (such as scam awareness and gambling protection). The lesson to learn from PayPal is that you should do everything you can to make the core offering of your business or product excellent while enhancing that with secondary features that support the impression of your business or product as excellent.