Is PayPal Safe For Domain Purchases?

Do you buy and sell domains as an investor? Are you buying a domain for your business from someone who has already registered it?

One question which always arises in these situations is how to pay for the domain name. It’s not as easy as just buying one at your favorite registrar. You’ll need to trust the other party and make sure they follow through with the domain transfer after you send the money.

The PayPal Question

Millions of people use PayPal to buy and sell both goods and services online. If you’ve used it enough, you’ve probably experienced a time when the other party didn’t uphold their end of the bargain. Maybe you paid for something on eBay and didn’t receive it, or the goods they sent didn’t meet your expectations. Due to its ubiquity, PayPal is also commonly used to pay for domains. With that in mind, it’s important to understand how PayPal protects buyers and sellers when it comes to intangible goods. Intangible goods are electronic items that do not have a physical item associated with them – such as domain names and software. Since they aren’t the same as tangible goods (such as clothes and books), they’re covered differently.

Using PayPal As A Domain Buyer – PayPal offers protection for domain buyers under its Purchase Protection Program. If you pay for a domain name with your PayPal account and the owner doesn’t transfer the domain to you, you can open a claim anytime within 180 days of the purchase.

Using PayPal As A Domain Seller – PayPal does not offer seller protection for intangible goods. That means if you accept payment for a domain via PayPal and the buyer ends up doing a credit card charge back or says they did not receive the domain name, PayPal will not cover it.

An Escrow Alternative

You might be thinking PayPal seems safe for buying domains, just not for selling them. However, it’s not quite that simple. Even with buyer protection, domain buyers are at the mercy of PayPal’s dispute process, which isn’t always fast and easy. That’s why many domain buyers and sellers prefer to use a domain escrow service. Services such as will hold the buyer’s funds until it receives proof that the domain has already been transferred. Escrow is a completely safe and secure option for both buyers and sellers, but there is one important factor to keep in mind. When someone buys a domain name from you using, you will need to push the domain over to them first and they will then need to click a link and confirm they received the domain. Although the funds which have been sent are completely safe, this extra step can be forgotten or missed by many buyers which can make the process take longer than you might have wanted. With that in mind, users wanting to use for all of their domain sales should consider getting a managed account. Other services, such as the Sedo Domain Transfer service, will take control of the domain name before releasing the funds and will then transfer the domain to the buyer automatically so they do not need to click anything confirming they actually received it. The risk of using PayPal is one reason domain sellers prefer to use an Escrow service instead. Escrow services will completely remove any risk for both parties involved and is 100% safe and secure.

Selling Domains Through A Registrar

Many registrars now offer their own domain marketplace, where you can buy and sell domain names kept directly at the registrar. These companies use similar Escrow processes which will also ensure both the domain name and funds reach each party. Domain registrars like GoDaddy, DynaDot, NameCheap, and NameSilo all have their own domain marketplaces and use an Escrow process to make sure transactions are done safely.