PayPal is most certainly NOT safe for merchants, especially those wishing to do international business. Many overseas customers are learning that they can legally scam U.S residents using PayPal and there's not a thing you or PayPal can do to stop it. I have personally been robbed of a few hundred dollars in this way but if you go to http://www.paypalsucks.com you will find find scores of people who have lost tens of thousands in PayPal scams while PayPal stood by, knowing exactly what was going on, and watched it happen.

In my own case I was in contact with PayPal staff via phone the moment I got wind of what was happening. The scam took a few days to process (reversal of credit card payment from payee after the goods had been received) and PayPal basically told me "we're sorry but there's nothing we can do about it".

I should point out that I have had over 100 trouble-free transactions via PayPal but this one experience, coupled with PayPal's complete refusal to assist me in any way (a situation experienced by many others - see the website mentioned earlier), has definitely left me with a cautious approach when it comes to PayPal.

Just my $0.02