When we talk about money wallets like PayPal, we are often concerned about security. Is my information safe? Is my money safe? These are some of the questions that constantly run through our minds.
To ensure the user’s security and identity, PayPal requires information such as the user’s name, Social Security Number, date of birth, and identity proof documents. In this article, we will look into detail and get answers to “Why does PayPal need my SSN?”
PayPal is an online financial service and not literally a bank. You can think of it as a mock of your physical wallet that holds your money, and you can spend that money whenever you need to purchase an item. Every online wallet has to ensure the utmost security to safeguard all of its users. PayPal asking for SSN is just a way of adding an extra layer of security to their application to protect users. Let’s look at this in more detail!!
Do you need to give your SSN to PayPal?
Every customer of PayPal is either a buyer or a seller.
If you are just a casual buyer on PayPal, you do not need to provide your SSN under any circumstances. PayPal makes multiple efforts to try and extract your SSN but does not comply with this. Avoid all attempts made by PayPal to ask for your SSN if you are just a casual buyer.
You are needed to provide your SSN only if you are a seller on PayPal and you have to collect payments from other PayPal customers or process business transactions.
Why does PayPal need my SSN?
As to speak, PayPal should not ask for the Social Security number as they are not a banking institution, but they have their own reasons.
The Internal Revenue Code ( IRC ) states that all US payment processors, such as PayPal, must provide information to IRS about customers who receive payments from selling goods or services through the app.
PayPal has to send a gross report to IRS ( Internal Revenue Service ) for sellers who receive $20,000 in gross payment volume.
PayPal will need your use for Tax ID or Social Security Number to send a tax form 1099-K to you and the IRS when the payments you receive either exceed $20,000 or you have received more than 200 payments in a calendar year.
Apart from the above reasons, some of the other reasons to answer the question “Why does PayPal need my SSN”:
- It is used for tax reporting purposes. As mentioned above, PayPal uses the Social Security Number to send a tax report to the IRS when the payments you receive exceed $20,000 or have received more than 200 payments in a calendar year.
- To provide an additional layer of security to the buyer. In this age and era of the Internet, security has become the most important thing to safeguard us online. The buyer has to be safeguarded from malicious sellers.
- To verify your identity. Your Social Security number is unique and can never be shared between two people. It helps identify you as an individual.
You will also have to provide your SSN if you sign up for PayPal credit.
Is it safe to provide your SSN to PayPal?
If you are concerned about whether your SSN and other personal information are safe with PayPal, you need not worry. PayPal has a good record with security and has taken every measure to ensure that its user’s information is safeguarded.
As is it a government rule to send a tax report for certain kinds of sellers, PayPal has been enforced to collect your Social Security Number. You need not think twice before you enter your SSN on the portal as the portal highly secure.
Having said all the above, also always remember that nothing online is ever completely 100% safe. Sometimes even the biggest of the big companies have faced a security threat. Although PayPal has invested maybe millions behind security, there is still a slight risk of a security threat. This is a risk that we must willingly take if we want to use the platform.
Before you provide your SSN, always double-check to see if the site is authentic and is not an impersonator of PayPal. Always be cautious of phishing emails.
If you face a security threat from any particular user of PayPal, read more about how to block someone on PayPal.
I hope you guys got the answer to “Why does PayPal need my SSN?”
Remember only to provide your SSN information if you are using the PayPal platform to collect payments or performing any business-related transactions. Once you provide the SSN details, there is no way to remove it from PayPal, so be double sure and careful before providing SSN details on PayPal.
Thnaks for reading!!