How does PayPal Work
Stuck about how to make a payment of those shoes that you just ordered online and are dying to wear? Well, sign up on PayPal, which will allow you to make Internet shopping possible. In order to understand how PayPal works, it is important to know what PayPal is. An e-commerce business, PayPal allows users to make payments and conduct money transfers over the Internet. It is a technological advancement on the age-old money transaction methods of checks and money orders.
So, how does PayPal work? Well, in a nutshell what PayPal does is creates an account for a user who is linked to either a bank account or a credit card account from which the debit for the online transaction happens. The person who receives this money can either receive it in his own PayPal account, get a check from the company or get it transferred to their bank accounts. PayPal charges a fee for the transaction it performs, depending on the currency used, the country of the purchaser/sender and the seller/recipient, the amount that is transacted and also the account type. In simple terms, PayPal is a middleman service that enables e-commerce all over the world.
PayPal: An Overview
PayPal was formed in the year 2000 in Palo Alto, California, as a result of a financial services company X.com and a Palm Pilot payments and cryptography company, Confinity. Together they created the online payment system PayPal. In the meantime, eBay realizing the growing importance of online transactions and necessity of online payments, bought Billpoint and made its official payment system, allowing it to be used only for auctions on eBay. This was the reason that PayPal caught on more widely. In 2002, when eBay realized that more than fifty percent of eBay users preferred PayPal as their method of payment, they bought PayPal for USD 1.5 billion. One of the earlier queries that most people pose was how do eBay and PayPal work together? Initially eBay required everyone on its Australian and United Kingdom sites to use eBay allowing them no other payment option, but they changed this stance soon, making PayPal one of the payment methods in Australia. Today PayPal is operated in almost 190 markets and allows its users to make transactions in 19 different currencies. It has local offices in 13 countries.
How PayPal Works
In order to make transactions using PayPal, you need to set up a PayPal account. Just use a valid email id to set up the account and follow the instructions that are given on the PayPal site once you click on Sign up. There are different account types that you can use on PayPal which include accounts for business and personal use. Once you have opened a PayPal account, you can make any transactions you want to. In order to make a purchase using PayPal, all you need to do is select the option on the website you are making the payment on. Choose the account from which the funds need to be debited and then the transaction will be conducted securely from your account into the vendor's account. This is the simplest explanation to the question, how does PayPal work. If you want to know how does eBay work with PayPal, the process is the same; you select the payment option as PayPal for eBay auctions.
The reason for the popularity of PayPal is simple. It saves a lot of time. It also allows you to save all data about your financial transactions in one place, so that you do not have to hunt around every time you make a transaction. It is faster than conventional forms of money transfer. PayPal, being a worldwide organization is accepted on almost all international merchant websites. It is also safe, as it protects the information you provide, never allowing a third party access to the data and it also employs a team to prevent any financial fraud.
So, now that you know what is PayPal and how does it work, you can sign up for your own account to make financial transactions. Understanding how PayPal works is very important, as you need to have all information possible to protect yourself from any kind of financial fraud. Understanding the system will allow you knowledge of how safe the financial transaction system is.
