If the choice is between giving my shopping habits to PayPal and my bank, then it’s not much of a choice at all. Also, I would assume that PayPal is in fact a bank! If you like the color blue, then let PayPal be your bank. I have not looked into it, but I believe it is registered as a bank in some countries in Europe.
Also, there is more than one PayPal. I already mentioned Klarna which is increasingly more common in Europe, and they have expanded to USA. In fact, they are currently the leading BNPL (buy now, pay later, a.k.a. invoicing/crediting) provider, holding 29% of market share, ahead of “PayPal Credit” with 24.2% market share, according to fresh Wappalyzer analytics. Just like PayPal, they are collecting shopping habits.
These companies are becoming unavoidable if you want to buy something online. Even when you want to pay for something with a debit card, with money going straight from your bank account to the seller’s account, via the payment processor of course. So even when you don’t buy with a credit/invoicing/BNPL, you still can’t avoid them and they will keep collecting your shopping habits until more people wake up and start protesting.
Just like you say about PayPal, when you buy something on a site that uses Klarna Checkout, your credit card information is safe with them (at the expense of your shopping habits). Credit card information is not stored on the site you’re buying from. It’s too big of a risk for the sellers to handle that sort of data themselves. I think that may even be against the law, they need to be accredited to handle that themselves. That’s why payment processing companies exist. Both PayPal and Klarna can fill in for that. But they are not the only ones.
PayEx is another example! PayPal, Klarna… these are all different buckets you place your trust in when you shop online. They are not the ones you’re buying from. But they handle the transactions and the relevant data. I personally like PayEx. They don’t ask any questions, like what my street address is, what my phone number is and so on. They purely focus on the actual banking transaction, like a bank would. The rest of the stuff, like what my phone number is, is left to the site to decide if they should make it a mandatory field when I place an order. I can’t elect to buy with PayEx, because unlike PayPal, they act in the background, and you will not even notice you’re relying on them to do the processing if you don’t pay attention to the page footer and the logos at checkout.
There are more examples like PayEx. There is one that I think may be a global payment processor, something responsible for all MasterCard or Visa transactions, something I have only noticed in my network activity when I buy something online. I don’t remember the exact name… it’s like “Acrot”… or something like that. I can almost guarantee it their domain name will appear in your network logs when you make a payment online. I know the name reminded me of an old British computer company.
So basically, if a seller/site is stuffing credit card information, they are doing it the wrong way. It should never be stored with them. But I know many will offer you the option, like “would you like us to save this card for you, so you can shop more easily the next time?” Making your life “easier”, one step at a time.