One lingering debate arising from eBay's plans, since abandoned, to make customers in Australia use PayPal as the only payments option for  purchases is the validity of their claims to be the most secure online payment instrument and the adequacy of  mechanisms to reimburse customers for losses.PayPal is the most secure method of making a payment online - according to PayPal. This claim is a key feature of PayPal's appeal to online shoppers but is hotly disputed by an increasing number of online merchants, other payment providers as well as by the Australian Payments Clearing Association.The recent failure of eBay's seventh largest Australian merchant, e-Business Supplies, has also highlighted the shortcomings of the PayPal system. Thousands of customers were left without the goods they had paid for and without a valid claim for a refund from PayPal's buyer protection program. So many claims emerged that PayPal set up a special fund to compensate customers caught out by EBS.Andrew Pipolo, chief executive of PayPal Australia, denied that the establishment of a special fund to compensate ripped off EBS customers highlights the limitations of PayPal's normal buyer protection program."EBS was a special set of circumstances affecting a large number of customers that warranted special treatment," said Pipolo in an interview on Friday."Most people recognised that if they paid with PayPal they were protected, if they paid with another method, it was up to their own devices as to how they were going to get their money back; they would have to register with the liquidator, etcetera."Customers paying with credit card may have a valid claim for a refund from their card issuer under the rules of those card schemes.  Customers paying via bank transfer would probably be the only people to have to register with the liquidator. Pipolo agreed that refunding ripped-off customers is not the same as providing a secure transaction. He said PayPal's claims to be the most secure payment instrument is based on three things: "The buyer and seller never exchange or reveal their financial information, PayPal monitors and scores each transaction to assess the likelihood of fraud and thirdly that the company's data has never been hacked."When hackers stole credit card details of a large merchant last year customers who used PayPal did not have their accounts compromised, Pipolo said."We have a very low rate of fraud," said Pipolo. "Around 0.27 per cent of all transactions; that's a global figure and that is very, very low."There is a lot of other figures put out there by various organisations that would seem on the face of it to be lower than that."What I would say to them is separate your online fraud from your offline fraud because we all know that transactions conducted in the physical world are, as a rule, much safer because they have been around much longer."APCA's latest fraud statistics for the year ended 2007 show that debit card fraud dropped to 7.1 cents per $1000 dollars while credit and charge card fraud increased slightly to