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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?

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    The information you mentioned (name, routing number, account number) is enough information for them to make transfers (which is why you shouldn't give this information out so someone you don't trust).
    – Nosrac
    Commented Feb 2, 2017 at 13:48
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    If security is a concern for your paypal account, consider to configure for two factor authorization. One method sends a code to your cell phone via text message, to pair with your password, while another uses a token, a device which generates a new number on a 30-60 second interval, which is then matched with your password. If you have a cell phone, there is no cost beyond text message pricing, while one has to purchase the token device.
    – fred_dot_u
    Commented Feb 2, 2017 at 14:16
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    You should specify which country you're in, as it may vary from country to country. In many cases, you can allow Paypal to initiate direct debits on your account, which means that they will indeed be able to draw money directly from it. This is not the case in all countries though.
    – jcaron
    Commented Feb 2, 2017 at 18:39
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    Additionally, I would have at least two accounts from your bank. One checking account that is connected to the paypal account and the other either a savings or an additional checking account that is not connected. I've been doing this for almost 6 years with paypal and only keep a limited amount in the account connected to paypal. This ensures no more than I'm willing to draw is ever exceeded.
    – Japster24
    Commented Feb 2, 2017 at 19:32
  • From the various PayPal articles below there seems to be confusion between answers. You're best bet, email PayPal with this exact question and see what they respond with.
    – Michael
    Commented Feb 2, 2017 at 21:06

5 Answers 5

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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.

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    " I don't read the text closely." Isn't that dangerous in this case?
    – Rex
    Commented Feb 2, 2017 at 17:50
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    @Rex Only if you don't trust PayPal.
    – FreeAsInBeer
    Commented Feb 2, 2017 at 18:59
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    @cybermonkey Yes, I've had that happen too where they use a backup form of payment instead of the primary form for no apparent reason. It is very annoying so I just deleted the backup from the account. PayPal is annoying in many ways, and I wish there was a good alternative...
    – minou
    Commented Feb 2, 2017 at 19:55
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    @Anoplexian, PayPal definitely can't withdraw money from your bank account without your consent, but given the ludicrous terms and conditions that no one ever reads and the Byzantine nature of PayPal's documentation it is hard for anyone to know what they've actually given consent for PayPal to do. I simply described my experience with how PayPal works in practice.
    – minou
    Commented Feb 2, 2017 at 22:29
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    @FreeAsInBeer don't trust paypal if you sell violins
    – Mindwin Remember Monica
    Commented Feb 3, 2017 at 13:17
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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.

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    Paypal is known for auto-transferring money out after things like a bad ruling on a chargeback on the other side (I've seen too many open-shut cases that went the wrong way). I don't know if they still do however. I'm lead to wonder what would happen if after that you told your bank that specific debit X was unauthorized.
    – Joshua
    Commented Feb 3, 2017 at 2:40
  • Note that it will happen only if you give Paypal access to your bank account.
    – reducing activity
    Commented Feb 3, 2017 at 8:38
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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: enter image description here

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

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.

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    Note that it is also possible to have linked bank bank without direct debit.
    – reducing activity
    Commented Feb 5, 2017 at 6:12
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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.

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

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    But does "asking for permission" simply mean a dialog box on PayPal's website, or would it necessitate me to log in to my bank account to transfer the money?
    – user123456
    Commented Feb 2, 2017 at 13:01
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    Paypal does not "ask permission" for a transaction once the account is configured for use. It will display that your paypal funds are coming from the bank account prior to clicking the transaction action button. That's how it works for eBay transactions, other vendors may not provide this information.
    – fred_dot_u
    Commented Feb 2, 2017 at 14:14
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    @fred_dot_u In fact, they do… at least in Germany, they explicitly expect you to configure that via settings – by checking a checkmark and saving the settings. If you don’t allow it, they are restricted by German law and may not simply withdraw money from your account. In Germany you have to explicitly opt-in for that; and something tells me it’s not the only country to have such legal restrictions which PayPal respects. Simply having given them your banking account details doesn’t suffice; not even after they verified your banking account.
    – e-sushi
    Commented Feb 2, 2017 at 17:41
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    PayPal sort of asks for permission: it informs you that, if you approve this transaction, the money will be withdrawn from your bank account.
    – Mark
    Commented Feb 2, 2017 at 19:43
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    This answer is not correct. They do. And not all debits are for purchase transactions. There are also for example e-bay monthly fees, which are.not subject to pre-approval: if they can't be funded entirely from your PayPal balance your bank a/c will be debited.
    – user207421
    Commented Feb 2, 2017 at 21:55

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