In Spain (not sure about Europe in general) things are slightly different.
I have been living in Canada for 9 years, and there if you see a transaction you don’t recognize in your credit card statement you phone your bank and they take care of that.
Here in Spain you need to go do the police, file a report, then talk to your bank, then they’ll think about it.
So when I came back I was talking with some guys I know and they convinced me that, at least around here, it’s still a good idea to use Paypal. You also get faster refunds, etc (and that could be due to some European regulation, not sure).
I’ve been using Fastmail for a few years and I’m quite happy with the service. Being a semi-large organization I expect their security to be OK, but if anyone has comments on that aspect I welcome them.
As for privacy, I always consider e-mail to be a postcard. If I want to encrypt something, I use GPG locally.