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"In the end, more debt than he can pay": Where the dangers of PayPal and Klarna lie

2023-06-05T13:12:25.652Z

Highlights: Online payment services PayPal and Klarna are simple, fast and popular. PayPal is the second most popular payment method for online purchases in 2021 at 28.2 percent. Credit bureau warns against so-called "buy now, pay later" offers. Klarna users are also popular targets for phishing attacks, in which cybercriminals send deceptively real-mails according to the U.S. firm e-pal or Klarna. In. In., Passkeys users increase the protection of their account.



Simple, fast and popular: Online payment services such as PayPal or Klarna are popular. But what are the dangers of paying at the click of a button?

Kassel – If you order an item on the Internet, you can usually choose PayPal or Klarna in addition to credit card, invoice and prepayment. The online payment services are simple, fast and popular. According to the "Online Payment 2022" study by the Cologne-based retail research institute EHI, PayPal is the second most popular payment method for online purchases in 2021 at 28.2 percent. But regardless of whether Klarna or PayPal, there are a few points that consumers should pay attention to when using online payment services.

Klarna and PayPal: Simple, fast – and completely free?

If you pay amounts immediately via PayPal, this service is free of charge. The service also does not charge for transferring money to friends – as long as it is a domestic transaction. Fees are incurred, for example, for business transactions, for personal international transactions or for the transfer of PayPal to one's own bank account.

Paying with PayPal and Co. also carries dangers. © Lukas Schulze/dpa/Symbolbild

As far as Klarna is concerned, consumers state on the website of the consumer advice centre that they have accidentally selected the installment purchase instead of a purchase on account. But whether unintentionally or not: installment payment counts as a loan and can even have a negative effect on your own credit bureau entry.

Credit bureau warns: "If you don't write it down, you end up with more debt than you can pay"

With PayPal you can also choose "Pay later" instead of the immediate payment. Again, it is possible to divide the amount into installments, which is considered a loan. Or you can choose a period after you pay the entire amount. Incidentally, the credit bureau warns on its site against these so-called "buy now, pay later" offers, where you receive the goods immediately, but only have to pay for them later.

She quotes the German banking and financial regulators: "Buy-now-pay-later offers don't feel like spending money. That's what's seductive." It also adds: "If you use such opportunities more often, you need a lot of discipline to keep track of everything. How much do I have to spend and when do I have to pay what? If you don't write it down or organize it in an app, you'll end up with more debt than you can pay."

If you don't keep track and can't pay the sum after the period, you have to pay interest. At Klarna, this is an effective annual interest rate of 14.79 percent – so with a purchase price of 499 euros in six months, this makes a good 20 euros additional costs, as the online guide Finanztip has calculated. PayPal demands 9.99 percent – in this case, the buyer has to pay 14 euros more in the same period.

Secure password? PayPal and Klarna are popular hacker targets

With both Klarna and PayPal, there is another risk that affects online accounts of any kind: the security of the password. Extra attention should be paid to this when it comes to your own finances. Otherwise, your own account can easily become a victim of hackers, who could then go on a shopping frenzy on the Internet at someone else's expense.

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When buying with Klarna, you should consider certain aspects. © Georg Wendt/dpa/Symbolbild

PayPal and Klarna users are also popular targets for phishing attacks, in which cybercriminals send deceptively real e-mails according to Paypal or Klarna. Likewise, one should beware of fake Klarna pages. In the U.S., Passkeys are already helping PayPal users increase the protection of their account.

Source: merkur

All life articles on 2023-06-05

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