Is PayPal asking for your social security number?
Whether you’re opening a brand new PayPal account or PayPal is suddenly requesting it despite never asking for it before, you may have cause for concern.
We all know that our SSNs aren’t to be shared with just anybody.
But why is PayPal requesting your social security number, and should you give it to them?
In this article, we’ll cover everything you need to know.
Why Is PayPal Asking For My SSN?
PayPal is one of the largest financial companies in the world. It has over 400 million users, and processes tens of millions of transactions every single day.
Like all major financial services, the requests for your social security number (or other tax ID if you have a business account) are almost certainly due to legal requirements by the United States.
Here are a few reasons why PayPal may be asking for your SSN:
1. To Report Your Income To The IRS
This is the big one, and it applies even if you aren’t using PayPal for business purposes.
If you receive more than $600 in a calendar year, PayPal is now required to report your payments to the IRS, and provide you with a 1099-K form (which will be available within your PayPal account, or sent to you in the mail.)
Because your tax ID is needed in order to submit this information, PayPal may ask you for your social security number ahead of time to ensure they meet all of their tax obligations.
Because PayPal isn’t sure how much you’ll be using their service (or what you’ll be using it for) when signing up, they may require your SSN before they allow you to process any payments.
2. To Verify Your Identity
PayPal may need your social security number in order to verify your identity.
Because social security numbers are unique to each individual, they are the ultimate verification method for companies like PayPal.
If you’ve previously had a PayPal account closed, other information was entered incorrectly or they simply need to ensure your identity for their records, this is another reason why they may request that you provide them with your SSN.
Note that it may not be a requirement to continue using PayPal – if it gives you an option to decline, you have every right to do so.
3. To Comply With Know Your Customer Laws
Know Your Customer regulations were first proposed in 2014, and are designed to prevent money-related crimes.
Some of these include money laundering, fraud, and preventing the funding of terrorism.
These regulations require financial companies like PayPal to assess the risk of customers and their transactions, while also taking steps to understand who is behind each account.
This way, the government can have a clear record of the usage of the service, and PayPal can assist in preventing their platform from being used to commit crimes.
Note that this is a routine procedure. PayPal asking for your SSN does not mean that you are suspected of anything illegal, or that you’re under investigation. It is simply a requirement they are legally compelled to follow.
Is It Safe To Give PayPal Your SSN?
Now that you know some of the reasons why PayPal might request your social security number, you may be wondering – is it safe to give it to them?
Fortunately, the answer is yes.
PayPal is a multi-billion dollar corporation, that is under strict scrutiny in regards to data protection. They have invested incredible amounts of money into the security of their systems and entering your SSN is just as safe on PayPal as it would be with any other major financial institution, including banks and credit card companies.
Therefore, you really don’t have to worry about your identity being stolen, or anything like that.
Just make sure when you enter it in that you are doing so from a secure computer, that is free of viruses or other malware.
Watch Out For Phishing
One other thing you’ll need to watch out for is phishing scams.
Phishing is essentially when you enter sensitive information (like passwords, or in this case your social security number) into fake websites.
Phishing sites in this sense are designed to look exactly like PayPal – only they’re not. When you enter the information in, instead of sending it to PayPal it sends it to whoever runs the phishing site.
This is obviously a bad thing and should be avoided.
So how do you avoid PayPal phishing scams?
To start out, you should never click on any suspicious links within emails or text messages, as this is how most phishing scams are sent now a days.
Instead, you should go to PayPal’s official website, PayPal.com, and sign in the way you normally would.
If PayPal needs additional information from you, they will notify you directly on their website.
When entering in sensitive information, always make sure that you are on PayPal.com by viewing the link in your website’s address bar.
Additionally, if you believe you may have received any suspicious emails pretending to be from PayPal, you should take advantage of PayPal’s spoof checking service.
Simply forward the email to [email protected], and they will take a look at it for you.
PayPal may need your social security number to comply with Know Your Customer laws, verify your identity, or report your income for taxes.
Thankfully, submitting your social security number, EIN or other tax ID is perfectly safe, provided you do it through PayPal’s official website.
Therefore, you really don’t have anything to worry about.
I hope that this article has cleared up some confusion. If you have any questions, please feel free to ask them using the comment form below.
Thank you for reading, and I’m wishing you the best!
– James McAllister