What is PayPal?
PayPal is an online payment processing system allows you to send and receive money online. Your account number is nothing but your login email id and you can add up to 8 email ids in one single account. This helps you to hide your real identity to others during payment or receiving money. But you need to verify your details with PayPal by adding a credit card or bank account to your account to make a transaction legitimate and legal.
Why Do I Need Online Payment Account with PayPal?
Most of the international online advertising programs pay through online account along with other payment modes. For example, Infolinks pays through PayPal with minimum payment as USD50 while minimum payment for bank transfer is USD100. Even Bing Ads allows PayPal payment receipt for advertisers living in US.
Why PayPal Not others?
PayPal is a simple and reliable way for online money transfer. Your PayPal account is just an email id and more conveniently you can add up to eight mail ids in a single account. Use any of these mail ids when registering for the programs. PayPal ensures safety by encrypting your transaction data and other than you none other can see your transaction details.
A PayPal account needs to be verified by either adding a bank account or linking a credit card to it. Credit cards linked with your account are used to pay and allow you to purchase an item or service without having any money in your PayPal account. For example, you can pay for online advertising with Microsoft’s Bing Ads using your PayPal account. The amount will be then charged on your credit card linked to your account. Therefore, by having a credit card linked to your PayPal account, you indirectly help your credit score.
When you receive a payment in your account, it can be sent to your bank account. The land of law controls both receiving and sending money through online. For example, some countries allow to keep the money in the account while the amount will be automatically remitted to your bank account in other countries.
Most important aspect of paying through PayPal is a buyer protection. If you did not receive the promised product then you can file a refund claim against the merchant. This helps the merchants to sell qualified products to buyer.
Benefits of PayPal Account
Here are some of the benefits you will get with PayPal account.
- Pay and Receive money securely without revealing your credit card or bank account.
- Send money as much as from 190 countries worldwide.
- Pay conveniently and quickly when you shop online.
- Shop worldwide at eBay and thousands of other online stores.
- Accept all payment types in multiple currencies for low fees.
- Sell internationally on eBay – offer PayPal on your listings.
- Safeguard your payments.
Note: There are restrictions on usage of PayPal depending on the country of living. For example, payments received will be send to your bank account on daily basis for Indian accounts.
There are no fee to join and send money within US using PayPal balance and bank transfer. But below is the transaction fee to send money using credit or debit card:
There is a fee to send money as a personal payment using a debit or credit card. The fee in the U.S. is 2.9% plus $0.30 USD of the amount you send. For example, if you send $100.00 USD by credit card, the fee would be $3.20 USD ($2.90 + $0.30).
Also there is a goods and services fee for receiving money from selling products:
There’s no fee to use PayPal to purchase goods or services. However, if you receive money for goods or services (such as from selling an item on eBay), the fee for each transaction is 2.9% plus $0.30 USD of the amount you receive.
One of the important features of PayPal is that users can setup pre-approved payments to merchants. This will enable you to pay monthly subscriptions and recurring payments automatically. At the same time, pre-approved payments can also cause you problem that you may end up in paying unnecessarily. Below is the video showing how to cancel the pre-approved payment in PayPal.
Restriction on PayPal Indian Account
As per Reserve Bank of India’s regulation, PayPal Indian account has the following additional restrictions:
- The balance amount is squared off to zero on every day basis. This means you should not be able to carry the balance to the next day.
- You can’t transfer money from one Indian PayPal account to another PayPal account.
Similar PayPal India, PayPal China has different set of rules which you can checkout in our article about PayPal beginners guide for China.
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