I actually have been doing this for years, since I don't trust PayPal too much (we use them since customer's ask for it)...

And today I ran into a video post that explains exactly what we do, so I figured I'd share it here for you:

http://www.bargaineering.com/articles/bvc-5-bank-account-firewalls.html

Basicaly, the idea is to create a "paypal firewall", so that if someone hacks your paypal account (or paypal decides they want to take money from your bank account for some reason), then the firewall results in the thief (or paypal, same thing) getting nothing from your bank account.

:)

(Note: I have no relationship with the blog author.. so if you click any of his links.. I believe they are all affiliate links.. you can simply copy/paste the affiliate info out if you don't want him to get the referral credit.)

That's interesting, I assume that these ING accounts aren't linked with any type of overdraft protection.

What this leaves out however is the aspect of having your paypal account hijacked. If something like this were to occur I doubt it would be business for usual with you. First of all ING would want their money for the overdraft and subsequent return (probably around 60 bucks). Now if your cool paying that well then I guess this setup will work for you.

I've never been on the end of having my PayPal account hijacked however i've dealt with people that have and PayPal takes absolutely NO responsibility for what goes on. So they aren't going to help you, ING isn't going to care because they are going to look at your situation and see what your doing and that's not going to be cool with them.

Theres a law here in the United States that restricts the amount of transactions that can be conducted with a savings account, im not sure if that would have anything to do with PayPal transactions but it probably would, some savings account banks don't even allow ach withdrawls.

It would be good to hear some success story's of this actually working out.

It works pretty well, I think.

In my own situation, I don't use ING as the "firewall" bank. I use a different bank.

So my paypal account is connected to an account in "BANK A" which has a $0 balance and no overdraft, etc. If someone tries to withdraw using ACH, the bank will charge me a $25 fee, and that's it.

When I withdraw funds from PayPal, it goes into this account, and as soon as it clears.. the money is immediately transferred into a different account.

So the idea is that your "paypal linked bank account" has a maximum exposure of $25 fees...

This protects me from both the possibility of someon hijacking my paypal account OR the possibility of paypal deciding (for whatever reason) that they want to withdraw money from my linked bank account. Neither situation will work, since there's no money to be taken.

(And yes, if you read paypals terms of service they have the right to withdraw from your linked account to cover any deficit. So for example, if someone sends you $1000 (or whatever) and then you withdraw it... and then later that person files a dispute and wins... paypal would automatically try to take the money from your linked bank account.

With the "bank firewall" in place.. paypal won't get anything until YOU decide you want to give it to them.

:)

(And yes, if you read paypals terms of service they have the right to withdraw from your linked account to cover any deficit. So for example, if someone sends you $1000 (or whatever) and then you withdraw it... and then later that person files a dispute and wins... paypal would automatically try to take the money from your linked bank account.



They might reserve that but they will usually just negative your PayPal account. If it's alot of money though it's hard to say what they would do. Assuming that your moving large amounts of money, to be able to withdrawal 1k they would already have your social security number.

At the end of the day, I don't think this is worth the hassle. I think it may look good on the face of it, but at the end of the day you have to clean up whatever happens.

I feel the same way about our merchant account and what bank accounts we have that thing linked to in the event of a chargeback.

I remember I had an unpleasant situation with PayPal and one of my banks once. I made a purchase with a merchant online and decided to cancel it. Instead of just refunding me the merchant sent me a payment for the exact amount. Due to the way I had everything setup it would appear to PayPal and my bank as if some type of "laundry" was going on and my bank froze my accounts until it was investigated.

What the heck? Just buy their key fob for like $5.00 . Only the person physically in possession of the key fob can access the account when used in conjunction with your login.

It works pretty well, I think.

In my own situation, I don't use ING as the "firewall" bank. I use a different bank.

So my paypal account is connected to an account in "BANK A" which has a $0 balance and no overdraft, etc. If someone tries to withdraw using ACH, the bank will charge me a $25 fee, and that's it.

When I withdraw funds from PayPal, it goes into this account, and as soon as it clears.. the money is immediately transferred into a different account.

So the idea is that your "paypal linked bank account" has a maximum exposure of $25 fees...

This protects me from both the possibility of someon hijacking my paypal account OR the possibility of paypal deciding (for whatever reason) that they want to withdraw money from my linked bank account. Neither situation will work, since there's no money to be taken.

(And yes, if you read paypals terms of service they have the right to withdraw from your linked account to cover any deficit. So for example, if someone sends you $1000 (or whatever) and then you withdraw it... and then later that person files a dispute and wins... paypal would automatically try to take the money from your linked bank account.

With the "bank firewall" in place.. paypal won't get anything until YOU decide you want to give it to them.

:)What about the credit card in your PayPal account? Other than bank, hackers can get money from your CC too. :confused:

I follow two basic things.
* I always visit paypal via browser bookmark from my personnel computer only. so no chance of phishing sites.I change my passwords like once in 3months.

* I use a Prepaid visa card instead of Credit card. it works exactly as credit card except it needs to be filled before use. so if someone tried to charge my card - it would declined due to insufficient balance. I only fill it when needed.

Till now, I am safe and there is no reason to believe i won't be in future

I follow two basic things.
* I always visit paypal via browser bookmark from my personnel computer only. so no chance of phishing sites.I change my passwords like once in 3months.

* I use a Prepaid visa card instead of Credit card. it works exactly as credit card except it needs to be filled before use. so if someone tried to charge my card - it would declined due to insufficient balance. I only fill it when needed.

Till now, I am safe and there is no reason to believe i won't be in future

I do these aswell.

I find paypal very safe though.

we did not have any problems with paypal or any other ebanking, you just have to be sure never to click on any links in phishing emails and use strong passwords which you change often

What the heck? Just buy their key fob for like $5.00 . Only the person physically in possession of the key fob can access the account when used in conjunction with your login.


Thanks Jeff, I honestly hadn't heard of this until now and just purchase mine. Should be here by Friday I hope :)

Thanks Jeff, I honestly hadn't heard of this until now and just purchase mine. Should be here by Friday I hope :)

When I ordered mine, it took a couple of weeks (at least) to arrive.

Very handy though. And if you have an iPhone, there's a Verisign app you can get for it as well to do the same thing (although I don't personally use that).