Today we’re going to take a quick look at a simple question. What exactly is PayPal and how does it work? The easy answer is it’s a way to send and receive payments, but there’s a little bit more than that. I’ll give you a little bit better knowledge of what exactly is happening here and see how it might help you out.
Let’s first look at it from the buyer’s side. When you want to make payments with PayPal the first thing you do is to create your PayPal account and you’ll treat it as a wallet. You can have your debit card and credit cards in there from various banks or credit card providers. You can have multiple bank accounts, checking accounts or savings accounts from a local branch from online banks. You can put all these into that PayPal wallet and when you make payments you can choose whichever funding source you’d like to use. So, your PayPal balance would be your cash. When you make payments with PayPal, every one of those financing sources are secured inside that PayPal wallet. So the vender will get your name, your email address, and a transportation address.
If you are shopping on many websites and using one credit card for payment, there is a high possibility that they could be saving your card number in their database. I’m not supposed to be saying that but a lot of them do and you know if they get hacked all of that data gets stolen. Now your credit card numbers and bank account information is included in that hacked data. This isn’t a good thing. But again when you pay with PayPal none of that information is provided to the seller. So, it protects you. This is one of the biggest advantages of using PayPal.
Now take a look at the seller’s side or when you need to receive payments. When you’re selling any products and services online or in person, you really want to make sure that you at least include PayPal as an option. If you don’t, those people who prefer it are not going to want to buy from you. In case you’re following conversion rates with Google or anything like that for instance, you’ll see that when you include PayPal as an alternative the conversion rates are going to go up like a considerable amount, so it’s recommended to incorporate PayPal as a choice. When you have PayPal as the option you might as well use them for your direct credit cards – everything will drop into a single account, and that just makes it easy on your bookkeeper to save some time and some money.
Worldwide money transfers are done through PayPal as it supports overseas payment. Now, one more thing you should know about PayPal is that it charges an amount as transaction fees for international money transfers. The conversion rate can be calculated by using PayPal currency converter tools that are available on the internet. Here is an amazing tool you can use to find out the conversion rates of PayPal.