Can PayPal transfer money automatically from my bank account if I link it in PayPal?

Question

I've just signed up for a PayPal account, and it gives me the option to link a bank account or add a credit card.

The credit card option would mean that PayPal can withdraw any amount of money necessary to pay for anything I purchase online.

The bank account part confuses me. To link my bank account, I'll need to give PayPal my bank, branch, and account number, and it seems like that's about it. Googling about whether PayPal can draw funds from my bank account on demand doesn't give any results that answer my question. But if I click the "Top Up" button in PayPal, it says that after linking my PayPal account, I still need to log in to my bank account to initiate the transfer.

I would like to limit the amount that PayPal is able to withdraw from my bank account, preferably so that PayPal would be unable to withdraw any money without me logging in to my bank account. (I would keep some PayPal credit in my PayPal account and transfer funds manually when I run low on PayPal credit.)

I would think that with my account number and other details I submit to PayPal to sign up, PayPal would be unable to get any money from my bank account without me initiating the transfer by logging into my bank account. Is this correct?

Answer 1

I have a PayPal account that I have linked to my bank account. My PayPal balance is always $0. When I make a purchase with PayPal, PayPal will automatically withdraw the funds from my bank account to make the purchase.

PayPal does not ask my permission for each purchase. I probably gave them permission to do this when I linked my bank account. Or perhaps the PayPal purchase process includes this permission. I don't read the text closely. Or I should add, that I probably read it at one point, but since I do it on a regular basis, I don't read it now, and I don't recall what is on the checkout page.

Answer 2

See this help article from Paypal about payment methods for purchases.

When you don’t have a PayPal balance or don’t have enough in your PayPal balance, we’ll use your bank account as the default payment method unless you select a different way to pay.

So yes, Paypal will automatically deduct from your bank account when you make a purchase, unless you link another payment method and make that your default.

This is the statement on the paypal agreement: "I hereby authorize PayPal to issue pre-authorized debits drawn on the bank account (the “Account”) added to my PayPal Account for my personal or business use." So yes, we agree to have money withdrawn automatically from our account.

Answer 3

As the other answers stated: Yes PayPal will transfer money from your bankaccount automatically if your PayPal balance isn't sufficient. Let's add some proof to the story: (Note, I am in the EU, specifically the Netherlands, situation might be different in other parts of the world)

If I login to PayPal and go to my wallet, I have a section that looks like this:

If I click on it, I am presented with a screen with details about the connection.

Note the "Direct debit instruction". If I click on the "view" link I am presented with the following text (emphasis mine):

[snip some arbitrary personal details]

This authorisation allows (A) PayPal to send instructions to your bank account and (B) your bank to debit your account in accordance with the instructions from PayPal. As part of your rights, you are entitled to a refund from your bank under the Terms and Conditions of your agreement with your bank. A refund must be claimed within 8 weeks starting from the date on which your account was debited. Your rights are explained in a statement that you can obtain from your bank.

Below this text is a button to delete the authorization.

Answer 4

Practically, as an ebay buyer I have never seen any way to keep a balance in paypal and top it off from my bank account under my own control. It is all automated, and as I seem to recall linking with a bank account or credit card was necessary to get some kind of "confirmed address" status out of Paypal so that eBay sellers would be more willing to trust me as a buyer and know that my shipping address was legitimate. As a seller, I can keep a balance at paypal from eBay sales and ask for it back in my checking account instead of keeping it in paypal to purchase items later.

In terms of advice, in my opinion the paypal transfer limits or how to set them is not the answer needed to protect one's finances in this situation.

In an error or cyberattack scenario, you have to consider the possibility that any limits are exceeded. When your online activity of any kind is linked to a bank account, any amount in that linked bank account is probably at risk. It doesn't really matter if it is paypal, or a server rental account, or amazon. If it can be abused, and it is linked to your bank account, then someone might abuse it and leave you with a bill. That you might be ultimately victorious is of little consequence if someone steals money you really needed right now and the devotion of time and energy to "work the bureaucracy" to get your money back will distract from performance at work or school.

So the next step up in protection is to firewall the bank account you use for online purchases from your other bank accounts where your salary is received. The best way to do it is with different banks instead of merely different accounts, but that is also the most inconvenient for filling the account back up.

Nowadays -- at least in the USA -- at several banks you can open a "free" checking account for a minimum deposit like $500 or $1000 that must stay in the account to be fee free at the end of each month. Whatever balance you keep in the account you use for your "risky" online transactions will be the maximum that can disappear in an incident, downside being you have to feed the account from time to time to keep it above the minimum as you make purchases.

Answer 5

The answer is no. Paypal will always ask for permission before adding or withdrawing money.