eBay bought PayPal a year or two ago and nearly all PayPal transactions on eBay are insured. If you look carefully you'll see the following note on most or all auctions: "Pay with PayPal and your full purchase price is covered "
I've had a PayPal account for almost 10 years and only had one minor problem when a buyer in Los Angeles paid me $70 for a computer video card with a stolen credit card number. PayPal's "seller protection" covered the loss though so I've never lost money through PayPal.
Buyers don't have to do anything special for purchases to be covered but as a seller you have to be sure and only ship to the registered PayPal shipping address and use a trackable method of shipping in order to be covered by seller protection.
PayPal is not a bank, however. They're just a company that moves money around. So you may have less protection under federal statutes than when using a bank credit card.
No safer at all!!!
Paypal are a waste of space and are just another branch of the ebay company, they make you offer it as a payment option so they can take yet another slice off your profits and line their pockets with it (as if they don't take enough already)
I bought an item, and wanted a refund because it wasn't as described, sent it back to the guy who refused to pay me - I opened a dispute with paypal and they didn't do anything. they just said they couldn't do anything at all!!! What sort of 'extra protection' is that???? They're a joke!!
I am still owed £50 for the item, I think it was around £5 for postage AND I paid the same to post the item back to the scammer. I even reported him to ebay and they did nothing either.
I'd stay well away if I were you.
Example 1:
You pay, they don't send, you report and don't get a refund 'cause they've left no funds in their paypal account.
example 2:
You pay, they send a piece of junk (recorded delivery). You lose.
On the whole though, my transactions have been trouble-free. It's just now & again you get a bummer
I use pay pal all the time - very safe
much safer but dont pay until you know it has been shipped