What Is PayPal Key and Where Can I Use It?

Breaking Down PayPal’s New Virtual Card

A shopper makes a mobile purchase with PayPal Key.
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Morsa Images / Getty Images

If you’re a PayPal user, you might get frustrated when an online seller doesn’t accept it as a payment method. Enter PayPal Key: It generates a virtual credit card you can use to make purchases online and over the phone. PayPal uses funds from your PayPal account to pay for Key transactions.

Learn more about what PayPal Key is, how to use it, and its pros and cons.

What Is PayPal Key?

PayPal has an ever-growing suite of payment services, so it’s easy to get confused. But the best way to think about PayPal Key is as a workaround for when you want to use PayPal, but an online retailer doesn’t offer the PayPal button on its site. PayPal Key provides a virtual card number that lets you shop anywhere online that accepts Mastercard. 

When you use PayPal Key for phone purchases, just provide the virtual card number, expiration date, and security code, just like you’d do with a regular credit card purchase.

How Does PayPal Key Work?

PayPal Key is brand new, which means it’s not yet available to all PayPal account holders. To find out if you have it, just log into your account or on to the PayPal app and look for the PayPal Key option.

If it’s there, all you really need to do to set it up is choose a payment method (one that’s already loaded in your PayPal Wallet). 

You can’t use PayPal Key for in-store purchases or link it to American Express cards. 

Once you agree to sign up for Key, you’ll receive the virtual card number (with expiration and security code information). You can begin using the card number for your online or phone purchases. 

PayPal’s directions break it down like this:

  1. Click set-up link. 
  2. Click “Let's Go.”
  3. Choose the payment method (bank account, credit, or debit card) to fund PayPal Key.
  4. Click “Agree & Get Your Key.”

You can save PayPal Key to your Google Chrome, Safari, or Internet Explorer browser so that it’s just a click away when you check out online.

Does PayPal Key Work With Other Services?

You can add your PayPal Key to your Venmo account. You can also link your PayPal Key to Google Pay to use only online. Currently, PayPal Key is not compatible with Apple Pay or Samsung Pay.

Are There Any Fees?

There is no fee to set up and use PayPal Key. However, if you make purchases in a currency other than U.S. dollars or buy from non-U.S. merchants, there will be a 1.1% foreign transaction fee. 

Most credit cards with foreign transaction fees charge 3%.

Will I Earn Rewards?

If you choose one of your rewards credit cards as the payment source for PayPal Key, you will still earn points on those purchases. 

Say you have a rewards card that offers bonus points or cash back for PayPal purchases. If you used PayPal Key for a purchase (even on a site that didn’t offer PayPal as an option), you may still be able to trigger the 5% back on that purchase. 

PayPal purchases aside, cards that offer rewards for travel purchases should earn those rewards if you use your Key to book travel.

Pros and Cons of PayPal Key

Pros
  • Let’s you use PayPal at sites that don’t offer the option

  • Can switch payment methods easily

  • Safer option for people who want to pay with debit cards online

  • Transactions covered by PayPal Purchase Protection

Cons
  • Not available to all PayPal users

  • Limitations on how it’s used

Pros Explained

  • Lets you use PayPal at sites that don’t offer the option: If you’re someone who gets frustrated when there’s no PayPal button at checkout, PayPal Key is probably a great fit for you.
  • Can switch payment methods easily: You can change your payment source for PayPal Key on the backend very quickly. This is convenient if you happen to have a PayPal balance you wish to use, or if you want to switch to a particular credit card to earn rewards for a specific category.
  • Safer option for people who want to pay with debit cards online: Anytime you can put a layer of protection in between your funding source and the checkout process, it’s a good thing. A virtual card number is the same idea, and since using debit cards online is generally considered risky behavior, PayPal Key lets customers pay from their bank accounts safely.
  • Transactions covered by PayPal Purchase Protection: PayPal offers purchase protection for any purchases you make with Key. If an item you purchase isn’t delivered or is “significantly different” than you ordered, PayPal may reimburse you for the purchase price and shipping charges.

Cons Explained

  • Not available to all PayPal users: Only select U.S. customers can use PayPal Key, but the company promises that Key will be more widely available soon.
  • Limitations on how it’s used: You can’t use PayPal Key with Apple Pay, Samsung Pay, or American Express cards. Also, you can’t use it for in-store purchases.

Alternatives to PayPal Key

If your main reason for using PayPal Key is for the additional layer of security when shopping online, you should note that several card issuers also offer their own versions of virtual cards for a more secure checkout experience. These include Capital One Eno, Citi, Wells Fargo, and others. There’s also Masterpass and Visa Checkout, which support cards from any network. 

Some people may prefer to use their mobile wallets (like Apple Pay), which also encrypts credit card information. The advantage of a mobile wallet over PayPal Key is that it can be used both in person and online. 

If you prefer to make as many purchases using PayPal as possible or if you want a safer way to pay with your bank account, using PayPal Key could offer peace of mind for your online shopping.