I wrote before that Paypal has already a facility to withdraw funds to a local bank account.   I used to withdraw funds to my HSBC credit card account as I usually use my credit card on almost anything (Sayang ang Miles/Points).  However, I noticed that each time I withdraw funds to my credit card,  my bonus points decrease.

Paypal withdrawal to HSBC’s credit card functions like a Credit Memo to the account.  Credit memo is seen as a credit transaction and such transaction negates my spending for that month and therefore, I don’t get credited for the points I should have earned from my purchases.

I therefore have no choice but to try the other route which is from paypal directly to my bank account.   I have some reservations about doing this as I know that if somebody hacks your paypal account, they can ultimately withdraw funds from your bank account by funding your paypal account from your bank account, then from there,  send money to their own paypal accounts.

I’ve also heard stories that paypal itself initiated funding of  their paypal account thru their respective bank accounts in case they need to “reverse” transactions.   I think paypal does this to protect buyers and sellers in case there are fraudulent transactions,  however,  some buyers from ebay dispute some transactions saying they didn’t receive any product even if they did.

To minimize such headaches,  I logged in to my trusty old HSBC internet banking account and just open up a new savings account. I was able to setup a new savings account in just a minute or two.   Yup, no need to go to a branch unlike other banks where you still need to be physically on site if you want to open another account.

Once I opened my new savings account,  I use this new account to link to my paypal account.  Then I just maintain a balance of about PHP1k on this account.   This means, whatever happens, the only money I can potentially lose is the money already in my paypal account, and the PHP1k I left on the new savings account.

So that’s a tip for paypal users.   Use a bank account that doesn’t have a lot of money in it.  Don’t use your main bank account where you keep your savings.  It’s not a good practice.  You might end up losing everything if a hacker/phisher got hold of your paypal account.
Ok, back to my new savings account.  I did a test run and transferred about PHP2k from paypal to my new HSBC bank account.  It worked flawlessly!  I did however got deducted PHP100 service charge.  I then checked the rates for local inward remittances and it seems like it is a flat fee of PHP100 regardless of amount.  Not bad if you ask me.

After a few days, I then proceed to transfer a bigger amount just to see if the service charge will stay PHP100.   Yes!  The charge really seems to be a flat PHP100.

After verifiying the funds,  I did transfer the paypal money from my new savings account, to my main bank account.  No charge for this type of transfer since it’s within the same bank.  And that completes the withdrawal of paypal funds to my HSBC bank account.  So now,  withdrawing from paypal to my HSBC bank account is now my first choice.