Ease of use

PayPal is quite user friendly and simple to use service. The only thing that is required at the time of registration is a valid email ID and debit/credit card number (bank account information). Procedure for registration is quite simple as explain below

• Go to the site www.paypal.com

PayPal – Home Page

• Click Sign Up button

Account Type

• Choose Country, Language and select the account type. There are 3 kinds of accounts that can be registered with PayPal. They are Personal, Premier and Business. Personal Account is for individual users who have little transaction and generally use it for online shopping, while Premier and Business is typically for more serious users who may perhaps use it for buying, selling (or business) work. Fee structure is same for all the accounts as listed below,

 Fee structure

 Cross Border Payments

User Info

• Enter user information (email, pwd, address, credit card details, etc) and submit by clicking on Agree and Create Account

On successful creation of account, one can use it for online shopping, money transfer etc.

PayPal Secure login

Transactions on PayPal are quite safe and secure. As you must be watching while registration or use, the address bar of browser contains https:// as below

Address Bar – Secure

Here http stands for Hyper Text Transport Protocol while ‘s’ stands for security. During the course of normal browsing you will only observe http and not ‘s’ because some pages are not secure. Its possible for the hackers to view the WebPage (data) transmitted over the net or wire by using specialized tools (such as packet sniffer), if they are transferred using http. On the other hand, if pages are transferred using https then it becomes virtually impossible or too hard to view the information, since its in the encrypted format. So server and client both encrypt the data before sending and the destination host decrypts it on reception using industry standard algorithms and procedures.

Point to be note here is that while using PayPal whether you are putting credit card details or password, you don’t have to worry about the security. More over PayPal employs dedicated team of professional who keep an eye on the people who are responsible for security breach. So looks like nothing to worry about.

How does PayPal makes money

PayPal claims that it’s a free service, but still there has to be some revenue generation model for the company to survive or flourish. They basically charge no fees from buyer (person who is giving money) but yes; they do charge a reasonable (around 1.9 to 2.9%) of transaction fees from seller (person who is receiving money). Also they earn from the interest on the money that has been give immediately by buyer but not withdrawn by seller. And in any case they take around 3-4 days to transfer money from PayPal account to the sellers (bank) account so looks like immediate withdrawal is not permissible!

Protection from Phishing

Unlike Online banking, PayPal is quite secure from phishing attacks. Phishing is basically a spoof up to acquire user’s important information such as online banking user id, password, credit card numbers etc by sending bogus mails, which look like they are from genuine party.

In normal banking user has to just enter user id /password combination to make a financial transaction while in the case of PayPal, user has to enter his or her email id & password at the sellers Website (or Web store). Then onwards he/she will get mail from PayPal to confirm the transaction. So there are two things, first user didn’t enter bank account number or Credit Card number (just email id and pwd) at the seller’s site and secondly the confirmation mail is the additional layer of security, which only the legitimate user will get.

Get more information about PayPal security tools.

Buyer and Seller Protection

One of the good parts with transaction done by PayPal is that they provide comprehensive Buyer and seller protection. If buyer doesn’t get the article exactly similar to one described on site or late delivery (not under committed timeline), buyer is entitled to get full refund on purchase. Same stands true for DOA (defective on arrival). Also seller should keep a note of shipment tracking number (and receipt) so that in case of discrepancy, it can be prove that the goods have indeed been delivered in good shape.

All in all to win the goodwill of buyers (as well as sellers), PayPal has to necessarily do a good job acting as mediator between the two. Buyer and seller both feel comfortable that their transaction is in good hands and there are no surprises!

How does PayPal work with eBay?

In order to purchase items on eBay you must first create a PayPal account. You need to add a funding source to that account which could either include your bank account information or your credit card information. Following the creation of an account, you will be sent an email informing you about the terms and conditions. The email would also contain the procedure for verifying your account.

If you have won the bid on eBay, you will be directed to a page that will allow you to make the payment. On that page, the payment amount, the shipping address and other details will be confirmed. After the payment has been made both the buyer and the seller are sent the details of the transaction. If either the buyer or the seller wishes to view this transaction at a later time, they can do that with the help of the ‘Account History’ tab. When you make payments through PayPal for any purchase made on eBay, money is deducted from your PayPal account.

Depending on the fund source that the buyer had selected at the time of account creation, money is deducted either from the bank account or it is charged on the credit card of the buyer. This money is then deposited to the seller’s account after subtracting a small amount. This small amount is the transaction fee that PayPal charges the person who will receive that amount. The buyer is not charged anything. The money deposited to the seller’s account remains there unless it is either withdrawn into a bank account or used to make payments online.

How Does PayPal Work When Selling?

If you intend to sell anything online and also wish to receive payments via PayPal both you and the buyer must have a PayPal account. You may either create a Premier account, which is meant for individuals or a Business Account which is meant for merchants. Once you have created your own PayPal account, you can sell online. If you wish to sell on eBay, you may link your eBay account with your PayPal account. Buyers will send you money by using your email address and theirs.

Even if you did not have a PayPal account, the buyer could use your email id or phone number. The buyer is not charged any fee for sending the payment unless he is making the payment through credit card. Once the buyer has made the payment PayPal will send you an email notification. In order to access that money, you need to have it transferred to your checking account. If you have a PayPal credit card or debit card you may also withdraw it directly from the ATM.

How Does PayPal Work For Merchants?

PayPal enables businesses to receive online payments securely. You may set-up a third-party merchant account with PayPal. In this method the credit card details are stored for charging to your clients. Once you have decided how much you want to sell a particular item for and also taken into account whether that charge will be recurring or not, you will be given a link which you can provide to your clients.

Then your clients will visit that link and sign-up with you. PayPal is the easiest and also the fastest way to transfer funds. Even if you have a merchant account, opening one with PayPal makes sense as there are very many people who refuse to use any other method of payment except PayPal.

Go to PayPal Merchant Services.

How Does PayPal Work For Sellers?

By choosing PayPal to receive payments you are making things simpler both for yourself as well as your buyers. For setting a PayPal account, sellers are not charged any fee; also there are no monthly charges. Sellers are charged a fee for each payment that is completed. When sellers list PayPal as a method for accepting payment they must be ready to receive payment via any means, be it a transfer from a bank account or a payment made via credit card. You cannot tell buyers that you can accept PayPal payments only in certain forms.

In order to be able to accept payments made via credit cards, you must be having either a Premier Account or a Business Account. If you have a Personal Account, you have to upgrade to a Premier Account. Once the buyer makes a payment you will obtain an email informing you of the same. Goods should only be shipped once the payment has been completed. Also remember that goods must be shipped using a traceable method. Once you select the shipping service you can have the invoice printed through PayPal.

The creation of paypal account takes a few minutes, and to verify the account you need to add your credit card and link it. This would also help in adding credits to your account when the online system is short of funds.

How to use Paypal on eBay

EBay is the company that runs Paypal, and itself being the biggest online shopping center, it makes people use Paypal as the payment processor to carry out transactions easily. This is how you can use Paypal on eBay -

• Have accounts created on both Paypal and eBay, which takes a few minutes.
• Login to your ebay account, and then go to My eBay section, and then go to “My Account” where you can select the option of Addresses.
• The Addresses has the option to add your shipping and paypal addresses, and use the “Add Paypal Address” option. Login to your paypal account, and this would link your Paypal account to the eBay account.

How to use Paypal on Amazon

With Amazon, we can not make the purchases directly on Paypal as they have not provided any option for that. Here is how you can still use Paypal to make purchases on Amazon -
Register for a Paypal debit card in your paypal account. Once it reaches you through mail, you need to confirm it and activate through the telephone call that comes listed on the attached sticker.
Now login to your Amazon account, and then add the desired items to your cart. You can then proceed to the checkout, and then use the details available on the card to make the payment. This debit card can be used as a normal credit card.

How to use Paypal to receive payments

Paypal can be used for different stuff like sending and receiving payments. You can use the account to sell products on eBay and get payments. You can make any direct deals through networks and forums, and get the payment through paypal. Even direct billing from websites too can be done.

For this, you just need a paypal account which is verified, and for the direct deals you just need the buyer know your Paypal email address i.e. the one you used to register on the Paypal website.
On your own online stores, paypal provides you payment buttons which come with the code that needs to be placed on your website, clicking which would take you to the Paypal page for payment.

How to use Paypal without a credit card

Using a paypal account without actually having a credit card linked to it, is probably hard but not impossible. You can always link your debit card with the account and use it to make the payments and also withdraw amount to the card from your account, but without using the credit card and just using a debit card, would not be enough to verify the account.

Another way of using the Paypal account without a credit card is using it with your bank account, where after receiving a good amount of payments, you can just withdraw the amount directly to your local bank account, and this doesn’t need any credit or debit cards.

But its very Surprising that paypal still is not advertising or spreading their toll free number, thinking they can scare people off by only offering their local number on their contact page.

Paypal Toll Free Phone Number:

1-888-221-1161

Also see this article on how does paypal work