PayPal

Paypal Introduction

Paypal was established in 1998 and is located in California and Ebay bought the company in 2002. PayPal is a very popular alternative payment method which has received numerous awards for their service, more than 20 awards in fact. They one two individual ‘Best Financial Services Site’ awards from the ‘06 Webby Awards and the ‘06 Webby People's Voice Awards respectively.

How Does Paypal Work?

Members use PayPal to send and receive money via the web, and you can do this once you sign up for a free PayPal account. You can fund you PayPal account via you credit card or bank account, and this will then allow you to make PayPal payments.

When you buy something via PayPal, you usually click on PayPal during the website in question’s checkout procedure. You can fund your account and PayPal will then transfer it securely to your beneficiary’s account. After you make a payment, PayPal will send your recipients an email to notify them that they have been paid.

An important issue to look at is how sellers transfer their PayPal funds into their banking accounts. This process is quite easy for US residents, as well as residents of 7 other preferred countries that allow transfers from PayPal accounts to bank accounts. US residents don’t pay for these transfers, although the other countries pay a small transaction fee. PayPal is currently accepting people from 43 countries but in only 7 of these countries outside the US can members transfer money: Canada, France, UK, Germany, Netherlands, Australia, and New Zealand. Keep in mind that it takes between three to five working days to withdraw cash from your PayPal account.

Paypal Pros and Cons

One of the reasons we would recommend PayPal is because of their low fees, especially for personal account clients. If you open a personal account, you can receive up to 100 dollars per month free of charge, whereas businesses account holders must always pay to get money. Instead of charging high fees like some other alternative payment methods PayPal only charges a % of the transaction and a small transaction fee.

Some people might say that PayPal is overprotective as they don’t allow certain countries to join. Individuals from countries such as South Africa are allowed to make payments but they are not allowed to receive funds. This can be frustrating for individuals who do freelance work for overseas companies. Also, some people have complained that PayPal has suspended their accounts without providing a good reason. The upside of PayPal’s strict security measures it that their fraud rate is much lower than most other alternative payment methods.

Outside of the eight preferred countries including USA, Canada, France, UK, Germany, Netherlands, Australia, and New Zealand, merchants aren’t able to easily transfer money out of their PayPal accounts. Some merchants wonder why PayPal could not simply mail a check in US dollars to merchants from these countries. PayPal is sticking to its guns and says they are an electronic transmission company and not a paper one, and that issuing checks cost a lot of money.

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