Which PayPal feature is specifically designed to mitigate the risk of unauthorized ACH debits?

PayPal's Preapproved Payments feature, specifically when combined with strong authentication measures and monitoring, is designed to mitigate the risk of unauthorized ACH (Automated Clearing House) debits. While not solely focused on ACH, Preapproved Payments requires the customer to explicitly authorize a merchant to debit their PayPal account (which may be linked to a bank account for ACH transfers) for future purchases or recurring payments. During the setup of Preapproved Payments, the customer agrees to the terms and conditions, including the maximum amount that can be debited and the frequency of payments. This initial authorization step significantly reduces the risk of unauthorized debits because the customer has knowingly granted permission. Furthermore, merchants should implement strong authentication measures, such as two-factor authentication, to protect their PayPal accounts from unauthorized access, which could be used to set up fraudulent Preapproved Payments. Regular monitoring of account activity and prompt investigation of any suspicious transactions are also crucial for preventing and detecting unauthorized ACH debits. Preapproved Payments provide a framework for authorized recurring transactions and, with proper security measures, limit potential risks.