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Bob Comperini - What Is PayPal?

Sign up for PayPal and start accepting credit card payments instantly.

What is PayPal?

Basically, PayPal is similar to an "online bank", allowing you to send money or receive money from anyone. The only requirement is that both people have e-mail (internet access), since that is how the transaction is processed.

The nice thing about using PayPal to send or receive money from someone is that it is absolutely free. There are no charges at all to send money (unlike "wiring money to someone"), nor is there any charge to receive money from someone.

To learn more, click on the PayPal banner at the top of the page.

From their website, you can simply "snoop around" to find out more about PayPal. As an added bonus, they will immediately give you $5 just for registering, regardless if you ever use them or not!

If its free, how do they make their money?

PayPal is completely free to use. It is free for you to send money to someone and it is free to receive money from someone (up to a certain limit. People that receive a lot of money in any given month, such as myself, will have to pay a small "service charge" for receiving a payment). You can immediately withdraw money in your account any time you desire. PayPal makes their money with the interest they earn on the money in your account, while it sits there. Obviously, they are betting you will leave your money in your account for some time, which would be in their best interest. But even if money sent to you stays in your account for only 3 days, they can still earn enough to cover the cost of the transaction.

Why do I use PayPal?

For me, this is the only way I could accept credit cards when people with to purchase things from me. Being an authorized credit card merchant is very expensive. There are many monthly charges and surcharges for each transaction. Since I do not have a large volume of credit card customers, it is simply not worth it for me to sign up as a merchant with a credit card company. Using PayPal, I can still accept credit cards from people at no charge to me or the customer.

Another reason I use it is convenience. People can purchase something, and pay for it immediately while online. Although I will accept personal checks from people, I have to wait for the check to clear before I can ship the products. When someone deposits money into my PayPal account, I know the money has been transfered, and I can immediately ship the goods without having to wait for a payment to arrive in the mail, and without having to worry about whether or not the check is valid.

I have used this service quite a few times, and find it very easy and quick.

How do I add money to my PayPal account?

From the PayPal website, you can "Add Funds" to your PayPal account three ways:

(1) By supplying a credit card number

(2) By authorizing PayPal to withdraw the funds directly (electronically) from my bank account (savings or checking)

(3) By sending a check to PayPal

Once money has been "added" to your PayPal account, you can immediately "send" any amount to anyone you choose.

How do I send money to someone using my PayPal account?

To send money to someone, you would go to their website, to the "Email Money" area. You will be asked for the e-mail address of the person you wish to send money to. You will then be asked for the dollar amount. Of course, you must have sufficient funds in your account to send to someone. If you do not, you will have to "add money" to your account, as previously described. Once you have entered the proper information, the money is immediately withdrawn from your PayPal account, and "sent" to the person you told them to send it to.

The recipient will receive an e-mail message indicating that you have sent them money. The recipient only has to register and log on to the PayPal website to retrieve the money. The e-mail message they receive will contain instructions for joining PayPal, if they are not already a member. And, as an added bonus, if they are not already a member, you and the person you sent the money to will receive an immediate $5 bonus just for having this new member sign up!

How do I receive money from someone using my PayPal account?

You can simply instruct people on how to go to the PayPal website and send you money, or from the PayPal website, you can "Request Money" from someone. This feature does nothing but format an e-mail message to whoever you choose. The e-mail message sent to this person will simply state that "you have requested money" for something, and will give them instructions on how to access the PayPal website to send money.

When someone sends money to you, you will be notified by e-mail that a deposit has been made to your account. You can then go to the website, and withdraw this money, or leave it in your account if you plan on sending money to others.

How do withdraw my money out of my PayPal account?

From the PayPal website, you would select the "Withdraw Funds" feature. From there, you will be given two choices:

(1) Electronic transfer - By Providing PayPal with your bank account information, they will electronically deposit your money into your bank account.

(2) Request a check from PayPal - They will mail a check to you.

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This page updated on: January 28, 2005
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