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For anyone who has purchased or sold through eBay, PayPal would be quite a familiar term. While PayPal for some seems to be synonymous with eBay, it surely isn’t its only game!
It is very true that it climbed its ladder to prominence thanks to its partnership with eBay, but is now popular among most online merchants as the best payment processor for online transactions.
WHAT IS PAYPAL?
You might not know what it is or what it does for you but 100 bucks says you would have used it atleast once! And how do you plan to pay these 100 bucks to me when I win this bet?
Well, PayPal is again the answer!! Be it completing transactions between buyers and sellers or to simply transfer funds electronically, PayPal is the most popular option that is going to be thrown at you.
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It simply is a third party online payment service that acts as a middleman between payment transactions and electronic fund transfers. It enhances easy and secure transactions between member accounts. It helps you send money and make payments to anyone with an email id.
PayPal makes use of the proven and bankable mechanism used by banks, financial institutions and credit card companies. It does not just store your card and bank details but also safeguards it using advanced fraud protection techniques.
HOW DOES PAYPAL WORK?
PayPal lets you transact and send money to each others email ids. But they aren’t at any point allowed to see the other party’s credit card information or bank details. Email address is the only factor that connects the buyer and the seller or the sender and the receiver.
The success of it can be attributed to its ability to secure the customer’s private information. You will feel confident enough to make payments even to total strangers!
HOW DOES PAYPAL MAKE MONEY?
It makes a living like any other financial broker does – by charging a fixed percentage on the amount transferred or paid to you. It does not charge you anything for setting up an account with them and only bills you for money received by you.
PayPal is free for buyers and payees in all fund transfers and it is the merchants and receivers that pay the transaction fee.
This might sound highly unconventional! But PayPal also earns an interest income on the money remaining un-transferred in the member accounts. Considering the large number of member accounts and transactions PayPal regularly indulges in, this actually turns out to be income generating for them.
SENDING MONEY
The first thing you would obviously need to do is to set up a PayPal account. It only takes you a few minutes to sign up and it is totally free. Register yourself giving the requisite details and log in into your new account to transfer money.
Head to the SEND PAYMENT tab straightaway and get started with the process. Input the email address and contact number of the receiver or the merchant. Double-check that you have the right email address.
Enter the amount to be paid and choose your payment currency. Choose the nature of the payment from among the options available in various tabs. Press the continue button to complete your side of the transaction.
Based upon the balance available in your account, the transaction will be charged to your payment source if needed.
RECEIVING MONEY
Your email address is the only information you need to disclose. You can use the PayPal site to request payment. You will be notified by email once the payment is credited. The money in your PayPal account can then be withdrawn to your bank account.
WHY WOULD I USE PAYPAL?
As a Payer or a Buyer
Security – Transact without disclosing your financial information and details.
Ease – An email address and a PayPal account and you are good to go!
Speed – Spares you the need to type in your card details or banking information each and every time you want to do an online transaction.
Zero Fees – Senders and buyers aren’t charged a fee.
Currency Friendly – It lets you pay even in your local currency.
Maintenance of records – It records your payment history and shows feedback’s for you as a reliable payer. It makes you look more trustworthy.
As a Payee or a Seller
Security – Your financial details are protected from buyers.
Guarantees – PayPal guarantee on successful payments and transactions.
No need of a Gateway – You don’t need to set up you own Payment Gateway to get paid through credit card payments. PayPal promises to do it for you.
Records and Feedback’s – It maintains records of feedback received by you proving that you are a dependable seller.
WHY WOULDN’T I USE PAYPAL?
The fees charged on each and every transaction you receive might be a huge turn off for some of the buyers. It also results in a higher pricing for products and affects their competitiveness in the market.
Freezing of accounts on the most obnoxious grounds is another reason why it isn’t preferred by many. Getting your account back to track is a time-consuming process.
FINAL VERDICT
Considering everything that we have discussed so far, the pros clearly outweigh the cons here by a mile and PayPal definitely is here to say. It is a secure and sensible choice for sellers and receivers to get paid easily. And for buyers, it definitely is something you can’t avoid. Most online merchants have setup PayPal in their sites. Make use of it!
We hope you found this article useful and informative as always. Do leave your valuable comments below and don’t forget to share this article with your friends.
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