How PayPal works

PayPal is a service created to simplify payments on the Internet. In fact, it allows individuals and companies to make money transfers online without providing a credit card number or bank account details. To use it, just connect to its website and open an account, at no cost and without deposit restrictions.

How do you say? Were you already aware of all this but it is still not very clear to you how PayPal works ? Well, then you would do well to read this guide: in the following lines I will in fact explain everything you need to know about the functionality of this famous service. Before you get scared, I would like to point out right away that, contrary to appearances, understanding how PayPal works is not complicated at all.

So if it is your intention to know more about it, I suggest you take a few minutes of free time and concentrate on reading the next paragraphs. I am sure that, in the end, you will finally have understood how PayPal works and that you will also be ready to say that it was actually a breeze. At this point, I just have to wish you good reading and a good continuation!

How to create a PayPal account

To understand how PayPal works, I suggest you "take action" immediately: sign up for the service and immediately open your online account. To start, then connected to the main PayPal web page , press the Register for free button located in the center of the page, then choose whether to open a Personal Account or a Business Account by placing the check mark next to the appropriate item and pressing the Continue button to go to the next step.

If you are wondering what are the differences between a Personal Account and a Business Account, I will immediately clear my mind about it: a Personal type account is intended for private users and allows you to take advantage of all the basic functions for making and requesting payments online; a Business type account is intended for companies (regardless of their size) and includes advanced functions (such as payments via email) and the use of the PayPal Commerce Platform , a complete tool to manage and grow your business. However, I'll talk about PayPal Business in a dedicated paragraph . Having clarified this, then opt for the solution that you think may be more congenial to your real needs.

Subsequently, in the new screen that opened, enter your mobile number and click on the Next button to proceed with entering the 6-digit code that PayPal will have sent you to verify the number entered. This step is mandatory, so your PayPal account will be linked to the phone number you provided.

After entering the numeric code, fill out the form that is proposed to you indicating the email address , name , surname and password you want to use to access the service (taking care to also enter it in the confirmation field) and then presses the blue button Come on .

Now fill out the second form that is proposed to you by entering the data relating to nationality , date of birth and your address , then put the check mark next to the item I confirm that I have read, given my consent and accepted the Conditions of use and the Privacy Statement of PayPal and to be of age and presses the Accept button and create account .

At this point your new PayPal account has been created and is almost ready to be used for the first time! Before you can start using the service, however, you need to take one more step: validate your e-mail address.

To do this, access the previously specified email box, go to the Inbox section , press the subject of the message that was sent to you by PayPal and then click on the Confirm email address item that you find in the message. At this point, the e-mail address is also confirmed and PayPal is ready to be used to the fullest!

You want to create your account using the PayPal app available for Android and iPhone / iPad . All you have to do is download it to your device through your phone's store, start it by pressing on its icon and tap the Register button on the main screen. After that, the procedures to follow are almost the same as I listed above: entering the telephone number and verification code, choosing the email and password to use, forms to fill in with personal data and having read the regulations. Simple, right?

However, in case you need more information about the procedure to be performed to register on PayPal, I suggest you take a look at my tutorial on how to create a PayPal account through which I have explained to you in an extremely detailed way how to proceed. .

How PayPal works to pay

Have you decided to open your PayPal account mainly to make online and non-online purchases, but you don't know how to proceed? Then continue reading: in the next lines you will find explained how to associate a card and / or a current account to your account and how to proceed, once this is done, with the different types of payments that PayPal makes available to its users.

How to associate a credit card and / or bank account with PayPal

Associating a card or a current account is a fundamental step as it also serves to verify your identity and remove the initial withdrawal / deposit limits set on the account. To be precise, in the event of limits, it is not possible to withdraw more than € 750.00 per month or € 1,000.00 per year from your account and it is not possible to collect sums exceeding € 2,500.00 .

• To associate a credit card to your PayPal account , press the button Connect a card or a bank account on the main page of the service (bottom right of the page) or press on the entry Wallet located in the top menu and then click on the button Connect card or bank account , click on Connect a card and fill out the form that is proposed to you by entering all the required data. Then enter the card number , select the circuit of the same ( Visa , Mastercard etc.) from the Card type drop-down menu , enter the expiry date, enter the CVV (the three-digit secret code found on the back of the card) and click on the Connect card button to complete the operation. At this point, a notification will be sent to the app connected to your card to confirm the entry of the same on your PayPal account and the symbolic payment of 0.00 euros, therefore confirm the operation by clicking on the notification of the app and then on the button Confirm / Authorize to conclude the operation.
• To associate a bank account with your PayPal account , press the Connect a card or a bank account item on the main page of the service (or press the Wallet item located in the menu at the top of your account page) and then click on the Connect item a bank account , enter the IBAN code of your account and click the Accept and Connect and Accept buttons .

If you have chosen to associate a bank account with your PayPal profile, two small amounts of between € 0.01 and € 0.50 will be deposited into your account. Therefore, check the account statement of the C / C and identify the two credits, then go back to the PayPal Wallet section, click on the account icon and press on the appropriate item that is shown to you to confirm the C / C. Finally, enter the amounts of the two credits received. In this way PayPal will be sure that you are the owner of the current account entered.

How to pay with PayPal

At this point you are the holder of an authenticated account that has no limits on transfers and has no reduced functions. So tell me: are you ready to find out how PayPal works in practice?

Let's start with paying for products purchased on the web. PayPal is officially supported by a wide range of online stores and websites. On sites that directly support PayPal it is possible to complete payments by simply clicking on the button with the service logo and typing the password of your account, that's all! Alternatively, you can also pay using your mobile number and PIN .

Another method to pay is contactless : if you need to make a payment in person, you can use the app on your smartphone, select the Scan / pay option, frame the seller's QR code with the camera , enter the amount and do tap on the Send button . In this way you will not have to handle money, credit cards or enter any type of password. The service is only available for those products that have the particular PayPal QR code and can be found in restaurants and food stores. Convenient, right?

If, on the other hand, you have to pay money to a company or person who owns a PayPal account, you just have to connect to the PayPal home page , select the Send icon or the Send and request item which is located at the top of the Web page service, enter the recipient 's name , email address or mobile number and press the Next key . In the new screen that has opened it is then necessary to enter the amount , choose whether to type a message in the space provided and press the Continue button .

Now, select the Send with Buyer Protection option if it is a purchase and you would like to receive a refund in case of a lost or damaged item or the Send to a trusted person option if your purpose is to send money to a friend or family member. In the new page that opens, check all the payment details, select the method you want to use (PayPal balance, current account or credit / debit card) and press the Send payment now button . It should be emphasized that in the absence of funds on the PayPal account, the service automatically withdraws the money from the card or current account associated with the account.

If the sending of money is intended for friends and family who do not have a PayPal account, it is necessary to click on the items Send money to a bank account or Send money to be withdrawn and create an account on Xoom , a PayPal service designed specifically for this. eventuality. Creating an account is extremely simple since the data already present in the PayPal account are used and it is only necessary to follow the instructions of the wizard.

Another possibility that PayPal offers is to manage recurring payments in a simple and convenient way , that is, all subscriptions and / or monthly expenses. What you need to do then is set PayPal as your preferred payment method on the various Internet sites of your subscriptions (for example Netflix , Spotify etc.), then go to your PayPal account to click on the gear icon , select the Payments item and press next to Manage your automatic payments . After that, all you have to do is set the payment method you prefer to use to transfer the money.

As for payment fees, sending money nationwide is free if you transfer funds between two PayPal accounts. If you are transferring money to PayPal funds in Canada, Europe I, Europe II, Northern Europe and the United States, the fee is € 1.99 while for any other market it is € 3.99 .

In the case of money transfers from a PayPal account to a current account or a card, the fee is free if it is a local bank account, while it amounts to 3% of the amount if it is to a US current account and 1% if it is a paper transfer.

Of course, you can also transfer the money in your PayPal account to yourself, by paying it to the current account or credit card associated with the account. Just select the Transfer money item that you find under the PayPal balance item in the Account Summary section .

How PayPal works to receive money

As I have already mentioned, in addition to paying and sending money, PayPal is a service that can also be used to receive money and request payments. Now I'll explain everything.

To receive money on PayPal, you just need to communicate the e-mail address associated with your account to whoever owes it. Once you have received the money in your account, you will receive an e-mail notification of the transaction and you will find the money immediately available in your PayPal balance. Simple right?

To request the execution of a payment it is instead necessary to press the Request icon located on the main page of the PayPal website, or press the Send and request item , select the Request option and then type the name , the e-mail address o the telephone number of the user from whom you intend to receive money who will be promptly requested to carry out the operation. Find more information in my guide on how to get paid on PayPal .

The commissions applied for the sale of goods or services through PayPal amount to max 3.4% + fixed rate for all types of sales, except for transactions using the QR Code and for payment by a user's card. not PayPal. For further details you can click here and consult the web page dedicated to the subject attached to the official PayPal website.

If, on the other hand, you want to pay money to your PayPal account, you must select the Transfer money item (in the PayPal balance section of the main page), click on Top up your balance and make a transfer to PayPal using the instructions provided by the service.

Another great way to get money into your PayPal account is to use PayPal.Me . It is a system designed by PayPal consisting in the creation of a personalized link for each account that can be shared via email, social network, chat and so on and so forth with the person from whom you want to receive money. Whoever receives the link can send a sum of money at will by simply clicking on it and following the quick and easy wizard proposed in the browser window.

To create your custom link, all you have to do is click on the gear icon to open your account settings and, under the heading Profile , click on Create your PayPal.Me link . In the new page opened, press the Create a PayPal.Me profile button , type in the space provided the name of the link you want to use (or use a suggested one) and press the Next button . Now you just have to accept the conditions of use by putting a check mark in the appropriate box and press the Accept and Create and Finish buttons to complete the operation.

How PayPal Business works

The PayPal Business Account , as mentioned above, is suitable for any type of business whether it is a small company, a large company or an e-commerce. Furthermore, opening it is free and it is only necessary to have an email address that is not already registered with the PayPal service (the procedure is also very similar to that described previously in the chapter dedicated to opening an account on PayPal. ).

Among the major advantages of this particular type of account there are certainly the tools made available to companies by PayPal Commerce Platform , the company's management platform, differentiated by the type of activity, which consist in simplifying payments (also for via telephone or email, with the possibility of creating and sending invoices), automated monitoring of transactions, assistance to beneficiaries, anti-money laundering checks, compliance reviews and many other useful services.