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Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. SHARE: S3studio/Getty Images January 18, 2021 Ana’s interest in finance developed out of her own entrepreneurial journey. As a business owner, she has first-hand experience with the topics she covers for Bankrate. As a finance expert, Ana has ghostwritten for CFOs of fintech companies and authored resources that help small business owners, finance departments, and everyone in between. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Terms apply to the offers listed on this page. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. Bankrate logo The Bankrate promise
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. PayPal dominates the digital payment scene. It has upwards of 360 million active users in more than 200 countries and facilitated . Since 1998, PayPal has been giving consumers alternative ways to make purchases and send and receive money online. PayPal lets you pay for things online with a bank account instead of a credit card and keeps your payment information hidden from merchants. It also makes sending money easy and, in most cases, free. PayPal has essentially made checks and costly wire transfer services obsolete. Decades since its founding, PayPal remains a top choice for online shopping and money transfers. Here’s what you need to know to get started with PayPal:
What is PayPal and how does it work
PayPal is an online payment system that makes paying for things online and sending and receiving money safe and secure. When you link your , credit card or debit card to your PayPal account, you can use PayPal to make purchases online with participating stores. PayPal serves as a middleman between your bank and merchants and keeps your payment information secure. You can also use PayPal to securely send money to friends and family as well as receive money from people. This feature is useful for splitting rent with roommates, for example, or receiving money for your birthday. What is PayPal Credit
PayPal Credit is PayPal’s credit line program. It’s like a , but can only be used to make online payments on websites that accept PayPal. Just like a traditional credit card, lets you defer payments. Why use PayPal
Secure transactions
When you use your debit or credit card to pay for things online, . PayPal provides an extra layer of protection by ensuring that merchants never see your sensitive data. PayPal also uses a number of , including end-to-end , optional two-factor account logins and email confirmations for transactions. Easy and convenient
PayPal is now the payment option after Visa, Mastercard, American Express and Discover and is available at millions of stores online. Have you ever wanted to make an online purchase but couldn’t because you didn’t have your credit card handy? You can use PayPal to make a payment via cards that are linked to your account, without having to retype your card numbers. All you need to do to make a purchase via PayPal is memorize (or save) your PayPal login information. Is PayPal free to use
Creating a PayPal account is free and online purchases and most personal transactions are also free. PayPal does, however, charge fees for certain types of transactions. Fees for purchases
There are no fees for making purchases online with retailers that accept PayPal as long as there’s no currency conversion involved. There is a 3 percent or 4 percent foreign transaction fee for purchases made in a foreign currency. Fees for personal transactions
When you send money to or receive money from friends and family for personal reasons, and not for any sort of commercial reason, PayPal considers this a personal transaction. PayPal has a special “Friends and Family” tab you can click when making personal transactions. Some of these transactions attract fees while others don’t, mostly based on where you’re drawing the funds from and where you’re sending them. If you use your PayPal balance, bank account, or Amex Send Account, there is no fee for a domestic personal transaction and a 5 percent fee (between $0.99 and $4.99 USD) for an international transaction. If you send money using a debit or credit card, you’ll be charged 2.9 percent if it’s domestic and 5 percent if it’s international, plus ($0.30 USD for payments originating in the U.S.). Is there a fee to receive money through PayPal? Generally speaking, no. It’s free to receive money from a friend through PayPal as long as there’s no involved. Fees for withdrawing money
There are some other fees you might encounter when using PayPal. While there’s no fee to transfer your PayPal account balance to a local account, you’ll have to wait for the funds to go through. If you want instant access, you’ll have to pay a 1 percent fee. In addition, drawing a check from your PayPal account comes with a $1.50 fee per withdrawal. How to make a PayPal account
Before you open a PayPal account, you need to decide what kind of account you want. PayPal offers two types of accounts: personal and business. Personal PayPal accounts
A personal PayPal account is the most common account for individual use. It’s all you’ll need to send and receive money or to use PayPal to make purchases online. This account also lets you access your purchase history, link new bank accounts and add credit cards to your account. Business PayPal accounts
PayPal also offers accounts that allow businesses to accept PayPal payments online as well as credit cards and debit cards online or in person, even if your customers don’t have PayPal accounts. Service-based businesses and professionals can also send invoices to clients and receive PayPal online payments securely. How to create a PayPal account
You can create a PayPal account from your computer or mobile browser or directly through the PayPal app. Here are the steps you’ll need to follow: Go to or download the PayPal app from the or . Click the blue “Sign Up” button. Select “Personal Account.” Add your phone number and you’ll receive a text with a security code to enter on the next screen. Enter your legal first and last name, email address and a secure password. Then, enter your mailing address and agree to PayPal’s privacy policy. This will create your account. Finally, add a credit card, debit card, or bank account to your PayPal account. How to send money via PayPal
There are several ways to send money via PayPal. The method you choose depends on who you’re sending money to, for what reason and what medium you want to use. How to send money via PayPal to friends and family
Whether you want to to a roommate for your share of the rent or shower your niece with cash on her birthday, follow these instructions for paying friends and family via PayPal: From the PayPal app or your online PayPal account, hit the “Send” button. Enter the name, email address or phone number of the person you want to send money to. You can also scan your friend’s PayPal QR code for a quick start. If the person doesn’t already have a PayPal account, they’ll be able to claim the money by making a free account. Enter the amount you want to send. You have the option to add a message, which could be a useful reminder to you and the recipient what the money’s for. For example, you could enter “July rent” or “Happy birthday, Georgia!” You’ll be asked what your PayPal online payment is for: “Friends and Family” or “Goods and Services.” The latter triggers a fee that the receiving account has to pay, so make sure you select the right option. How to send money via PayPal for products and services
Let’s say you hire a landscaper to mow your lawn and you want to use PayPal to pay the bill, or you run out of cash at a flea market and want to buy something from a vendor who accepts PayPal. This is how to send money for products and services via PayPal: If the vendor has a QR code, hit “Scan/Pay” in the app to get started. Otherwise, from the PayPal app or your online PayPal account, hit the “Send” button. Then enter the name, email address or phone number of the person you want to send money to. Enter the amount you want to send. You can add a note (e.g., “Lawn mowing” or “Antique dresser”) to remind the merchant and yourself what the payment is for. PayPal will ask you whether you’re sending money to “Friends and Family” or paying for “Goods and Services.” Getting paid through PayPal
Whether you’re wondering how to receive money on PayPal from a friend, how to receive PayPal payments from customers or how to create an invoice on PayPal, getting paid through PayPal is simple. Keep in mind that there are involved with some payment options. So make sure you understand the best choice for your situation. From the PayPal app or your online PayPal account, hit the “Request” button. From here you can choose from the following options: Enter the email or mobile number of the person paying you Create a PayPal.Me link to share Split a bill Create an invoice Your friend can also initiate a payment through PayPal to send you money by entering your email or mobile number. When someone sends you money, you’ll receive a notification via email and/or the PayPal app. The money is deposited into your PayPal account. You can keep the money in your PayPal account to apply it toward future transactions or . Alternatives to PayPal
Venmo
is a convenient mobile app that doesn’t charge transaction fees when you request money. The company makes money by charging fees for sending money via credit card and for instant transfers. Standard transfers are free. Venmo has a unique social networking feature. Cash App
Cash App enables people to send money and make online and in-store purchases from their phone. You can load your with funds from a bank account, debit card or credit card. If you don’t have a bank account, you can sign up for the Cash Card debit card, which is tied to your app’s balance. You can use the debit card, or its e-wallet version, wherever Visa is accepted. Skrill
Just like its competitors, lets its users easily send money. Its biggest differentiator is that the tool doesn’t charge foreign transaction fees to send money abroad from the United States. Just make sure to use your account regularly to avoid a $5 inactivity fee. Skrill offers its users The Skrill Visa Prepaid Card with an e-wallet option. The card has a loyalty program that lets you earn rewards for every purchase. SHARE: Ana’s interest in finance developed out of her own entrepreneurial journey. As a business owner, she has first-hand experience with the topics she covers for Bankrate. As a finance expert, Ana has ghostwritten for CFOs of fintech companies and authored resources that help small business owners, finance departments, and everyone in between. Related Articles