<p>I am pretty sure paypal is doing that primarily to save on card fees, which especiially for Amex can be up to 10% of the total. It costs them a lot less to link to your bank account and quite frankly, if a fraud happens, they are sticking most of the burden on the consumer. If my credit card linked to paypal ever got hit with fraudulent transactions, the credit card company by law cannot hit me with more then 50 bucks (and Amex has never done that, they take the dispute item off my bill immediately and resolve it). Banks are not so friendly, they often fight tooth and nail with account debits or debit card transactions that are wrong, they don’t tell you that when they encourage you to use debit cards, but I have seen it time and again where banks basically drag their heels and refuse to help. </p>
<p>The charm of paypal is that it decouples your credit card or account information from the seller, they simply get paid by pay pal, but paypal basically is moving towards doing very little to cover the consumer. Their ‘fraud protection’ is about as good as some insurance policies, that basically when you try and get paid, they tell you to ‘sue me’. Now that Paypal is a big deal, they probably have lawyers and beancounters and management consulting firms telling them how to maximize their end of the deal and telling them customers won’t leave if they foul them.</p>
<p>I know people who use paypal a lot, and they have done what others have done, opened up a bank account for paypal stuff, which among other things,means if something goes wrong the liability is limited, since they keep money there only to cover a transaction they wiish to make.</p>