Can someone explain paypal

[beavereater]

I've never used it. I don't want to use a credit card online. However, living in Japan and wanting to buy goods from Canada and the US, I think it's about the easiest I can get. What I was wondering was...does paypal store your credit card or bank information to make payments? How does it work exactly? What kind of payments do you have to make to paypal or your bank account?

[stantheman1976]

Yes, they store your information. You provide account information and they verify your identity with that. You can add other cards to your account and when you pay through them you choose what account you want the money to come from.

If you receive money though Paypal they get a small percent of what you are sent. That's how they make money. The money you are transferred sits in the Paypal account and you have to shoose to spend it from there or have it transferred to your bank account.

If you are unsure about Paypal I've used it for years and had no problem. Millions of people use it every day.

[beavereater]

So if I were to buy something for 100 dollars, the person receiving the 100 dollars would have a percentage of that money taken off? They would lose some of their earnings? Or do companies usually add a small percentage for Paypal usage?

[stantheman1976]

yes, if you pay someone $100 Paypal will automatically get small percentage of that money. That's how Paypal makes money. It is a "convenience charge", let's say. Sending money is free though. It is a legitimate business and extremely convebient.

Look at it from a seller's perspective. If somoene sends you a check you have to make sure the check clears and if it doesn't then you don't get your moeny. It's time consuming and risky. Unless you sell hundreds or thousands of dollars worth of stuff every day then setting up a credit card system of your own is not worth the time or money. You set up a free account with Paypal. Someone sends you money. Paypal takes a little bit of it and you have your money deposited directly into your bank account. All that time you never have to leave your PC. Both Paypal and you make money and the buyer gets what they want. Everyone is happy. That's why so many sellers on eBay and other sites use it. The convenience is outstanding.

[MackemX]

basically if the seller has a premier account then they will pay a fee when you send them money. If they have a basic account then they can't receive things like credit card funded payments and have a limit of how much they can receive in a month (£250 or £500 maybe) but they don't get charged

even so Paypal still has it's risks as they can freeze your account or cancel transactions. I don't know the specifics but I'm sure there is a site called paypalsucks or something

[ZAPPER]

You may consider opening a small checking account that gives you a Visa check card to use for online transactions and the like. I had one that was free if I kept like $500 in it, but I fumbled, banks merged, fees started, yaddy yadda. At any rate I think that a seperate account for elelectronic transactions is a good idea if you can beat the fees. The thing is, most banks want to tie all of your accounts together, and while this can make bookkeeping easier, I still worry about security though.

[glockjs]

i use my bank card online all the time :/ sometimes i think i should be a lil more cautious..but..NAH

btw beave all credit card companies charge merchants a fee for using their cards. discover 2%, visa/mastercard 3%, amex 4%.

[ZAPPER]

Percentage and or transaction fee, depending on what service or account you can swing. But it is still a better risk than checks and more conveinent I suppose, otherwise it wouldn't be so common.


A buddy of mine just got credit card billing for his company. He said that it is more confusing than insurance but a big help for customers to be able to spread out the payments.

[12Quidkidinnit]

How does it work exactly? What kind of payments do you have to make to paypal or your bank account?

Paypal is a kind of virtual money account. If for instance you sold something on ebay, and got paid via paypal, the money in your paypal account could be used to pay for ebay items that you might buy. Or, you could transfer money from your bank account or credit card, into your paypal account, and again use the paypal account to pay for things on line (not just ebay).
There are risks with any financial transaction. The risks with paypal are that they can and do sometimes freeze people's accounts, if they suspect fraud has taken place. Another risk is this. You could sell an expensive item, say for example a £500 TAG watch, and post it as soon as the payment arrived in your paypal account. Then, after it's too late for you to do anything about it, paypal could reverse the transaction if the person who had paid you complained to them, or if they had used a stolen credit card to fund their paypal account. They would have the watch, you would have no money, no watch and little prospect of getting your money or the watch. If the money had already cleared into your bank account, and if you had spent it, paypal could do what is called a chargeback, and in some cases this can mean the money is taken from the account holders credit card. A lot of people do tell horror stories about paypal, and lots more have absolutely no problems at all. There is a site called paypal sucks. com. I had a read of some of the threads one night and thought it was quite interesting. But if you're careful about who you do business with, you should be alright.

[frankiec]

There are risks with any financial transaction.

"The way I see it is that there is no right or wrong" risks.

[ViRaL1]

PayPal is also offering the 'PayPal Virtual Debit Card' with their accounts. After you setup your PayPal account and this service, it will automatically generate a virtual one-time use card number that you can use without worrying about compromising your accounts and opening them up to recurring charges down the road. Some banks / credit cards also offer a simiar service. This is a good idea if you're buying from someone you haven't bought from before or someone who you don't fully trust with your card number.

[zzyzzx]

http://en.wikipedia.org/wiki/paypal

[lordsmurf]

Just remember that Paypal is not a bank and does not abide by FDIC.