What is the Reason for PayPal Charging $1.95 to Check Balances on Our Accounts?

If you've ever tried to link your credit or debit card to PayPal or checked your balance, you might have noticed a temporary charge of $1.95 on your account. While it may seem confusing or even frustrating, this charge has a specific purpose, and rest assured, it's not a fee that PayPal retains. So, why exactly does PayPal charge $1.95 when you check your balance or link a card? Let's break it down.

1. Security Verification

The primary reason for the $1.95 charge is verification. PayPal needs to confirm that the card you're linking or using belongs to you and that it’s a valid, active card. This small, temporary charge helps ensure that the account holder has access to the card statement. When PayPal makes this charge, they generate a unique code, which you will later see on your card statement. Entering this code into your PayPal account confirms that the card is indeed yours.

2. Fraud Prevention

Online transactions are vulnerable to fraudulent activity. By charging a small amount like $1.95 and requiring users to verify it, PayPal adds an extra layer of protection. It ensures that only the cardholder (who has access to the card’s statement or app) can link and use the card. This verification step helps prevent unauthorized individuals from adding your card to their PayPal account without your consent.

3. Temporary Hold, Not a Permanent Fee

The $1.95 is not a fee PayPal is keeping—it’s just a temporary hold. Once the card is successfully verified, PayPal refunds this amount to your account. Depending on your card issuer, the refund might appear immediately or could take up to 30 days. So, while it may seem like PayPal is charging you, they are only ensuring your card is active and linked correctly.

4. Why Not Free?

You may wonder, "Why doesn’t PayPal just make this verification process free?" The answer lies in practicality. PayPal uses the charge to trigger the generation of a statement entry that includes the unique verification code. If no charge was made, there would be no way for PayPal to show up on your statement or app, thus defeating the verification process.

Conclusion

In summary, the $1.95 charge that PayPal applies when you check your balance or link a new card is a temporary hold used for security verification and fraud prevention. Once your card is verified, you’ll see this charge refunded. It’s PayPal’s way of keeping your account secure and ensuring that all cards linked to your account are authorized and valid.

While it may seem like an inconvenience at first, this small step is essential in maintaining the security of your online transactions.