A Complete Guide to Making PayPal Your Best Shopping Friend


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Whether we’re buying groceries and gifts or paying people to stand in line, roughly 8 out of every 10 Americans are now online shoppers. That means since 2000, 57% more people trust the online experience with their shopping.

As millions of consumers are transitioning to shopping online, PayPal has emerged as an industry leader in providing the means for easy and secure online payments.

So how exactly does PayPal work?

PayPal is an online payment service that allows individuals and businesses to transfer funds electronically. It’s tremendously convenient, and more and more retailers rely on PayPal as their primary payment interface.

This service is useful in transactions such as sending payments to cover your fantasy football entry fee, paying for your winning eBay auction to recover a favorite Barbie, donating money to hurricane relief or other charities, or thousands of other daily transactions once reserved for cash or credit card.

Simply open an account on your PC or mobile device, and PayPal does the work for you.  Send or receive money instantly, conveniently and securely.

Choosing the best PayPal account for your circumstances

There are three different types of PayPal accounts – personal, premier, and business accounts.


A personal account is the most common account for individual use, and is all you’ll need to send money to individuals or shop online at thousands of websites. You can access your purchase history, double check past payments and add new checking or savings accounts online or through the PayPal mobile app.


Premier accounts are best for casual sellers or non-businesses who intend to get paid online and also plan to make purchases.


PayPal also offers a business account service which allows customers to accept PayPal online or at a register. The PayPal business account also provides a secure option for sending invoices to clients. The website recommends a business account for merchants working under a company or group name and provides access to up to 200 employees.

How to set up a PayPal account

The beauty of a PayPal account is its simple and easy-to-use interface. Need to send a roommate money to cover pizza? PayPal will take less time than the delivery guy.

Here’s how to set up a new personal PayPal account on either a desktop or mobile device:

  1. Go to the official PayPal.com website.
  2. Choose either personal or business.
  3. Enter your legal first and last name, desired email address and a secure password.
  4. Enter your street address, city, state, zip code and mobile number.
  5. Confirm your account via email.

How to add a bank account and send money using PayPal

After completing the onboarding process, PayPal gives you the opportunity to start shopping, receive money or sign up for a PayPal credit card.

  1. Click “Send Money” to link to a debit or credit card. You will have the option on the next screen to link to a checking account if you prefer.
  2. Enter the debit or credit card number, expiration date, and CSC number – that’s the three-digit code on the back of the card – and double check that your billing address is correct.
  3. Click “Link a bank instead” and enter your routing and account number.

Sending money using the PayPal service is a painless process

After adding a bank account to the secure website, enter the email address or telephone number of the intended recipient. Users can complete this process either on a computer or using the PayPal mobile app.

The funds are immediately transferred to the designated party and deducted from your checking account. PayPal will email a receipt of the transaction to your assigned email address and will alert the recipients that funds are waiting.

Are there fees to using PayPal?

PayPal does not charge a fee for opening an account; nor does is cost to transfer money from a PayPal account to a bank account.

The service is also free when sending or receiving money from friends or family in the U.S. and if the transaction is done through the PayPal website using only an existing balance or bank account or a combination of both.

The company does charge small fees for the following circumstances:

  • When users receive money from the purchase of goods or services such as selling items on eBay, freelancing services or small business services.
  • Payments received from parties outside their country or region.
  • Payments sent to another country.

When users sell products through PayPal, the fee incurred is 2.9% + $0.30 per transaction. This fee is determined by several factors, including the industry, sale amount and type of card used in the transaction. The fee is a combination of percentages taken from the transaction amount and credit cards connected to the account.

For detailed explanation on the fees associated with selling using PayPal, consult the official beginner’s guide to PayPal processing fees.

If a PayPal user prefers to receive a check by mail, a fee will be charged to their account.

How secure is PayPal?

According to the PayPal website, the service is safe for buyers and sellers as long as all parties follow the appropriate security protocols, including two-factor verification.

PayPal monitors transactions 24 hours a day/7 days a week, guards every transaction from start to finish with encryption technology and never shares a user financial information with sellers.

PayPal offers a service called Purchase Protection covering any potential problems such as a purchased item not arriving or if an item is not as the seller described. In these instances, PayPal will arrange for a full refund.

Is PayPal the best way to pay for goods or services online?

With the ease of sign-up, few transaction fees, extensive security measures, and acceptance at over 19 million online retailers including Target, Wayfair, Zappos and more, it’s easy to see why PayPal is the first choice of shopping buddies for millions of Americans.