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How To Use Paypal
Paypal allows you to send and receive money over the Internet quickly, securely and easily. Sounds simple and it basically is. Started in 1998, Paypal has 40 million account members all over the world today. The company was bought by eBay in 2002 and offers services in 38 countries.
Ecommerce brought a new need for securely transferring money over the Internet and Paypal helped solve the problem. Paypal allows you to effectively transfer money over the Internet without having to give your credit card numbers to unknown sellers.
Paypal allows people to transfer money with just an email account. Registering with Paypal is free and easy. You need your email address and the process is easy. Once registered you can start receiving and sending payment.
Registering is easy. You have to answer basic questions and choose your own login and password. You are then sent an email confirmation, which you confirm back on the Paypal site and finish up the registration.
You may ask how Paypal makes a profit. Well, when dealing just in the United States, Paypal is free for the buyer. There are fees associated with each transaction for the seller. At this time it is .30 cents per transaction. If you accept a credit card payment, then you are charged 2.2% of the total payment. However, Paypal is also making money from the float of the money in its system, just like a bank would do.
There are several types of accounts offered by Paypal including Personal, Premier and Business Accounts. Personal accounts allow you to send and receive money for free but you cannot accept credit card payments. Funds must be in your Paypal account already or taken from your bank account. For Premier accounts, you can send money for free and receive money for a fee (unless the money is in that person’s account already), you can also get a free ATM debit card and have access to customer service hotline. The Business account includes everything the Premier account has plus includes multiple logins.
When using Paypal for international deals, the seller pays a small transaction fee. There also may be exchange rate fees that apply when dealing with multiple currency transactions.
When you receive a payment, you will get an email that says, “You’ve got cash”. Then you have to accept the payment and the money will instantly be put into your Paypal account. To get the money out, you have several options. You can use your account balance to pay someone else, withdraw the balance via your bank account, sign up for a Paypal money market reserve fund to earn interest on your balance, or you can request a Paypal ATM/Debit Card and withdraw your balance anywhere MasterCard or Cirrus logos are displayed. You can also withdraw the money from any ATM with your Paypal ATM/Debit Card although some fees may apply.
Tracking payments is easy with Paypal. You can maintain a history log of all your transactions. You will be informed if your payment was claimed, unclaimed, denied or returned.
Sending payments can be done easily via credit cards, your bank account or your Paypal account. You enter in the email of the person you want to pay, fill out a form online and then they get a message telling them that they received a payment, and they can accept or reject the payment. It is an easy way of paying without having to give your credit card information to people you do not know.
You should be familiar with Paypal’s user agreement. Read through the agreement before signing up or changing your account type. There are some limits with Paypal. Know the limits associated with the type of account you want to open. For instance, with a Personal account you cannot receive more than $1000 worth of payments per month. There are also sending limits ($2,000) for some accounts.
When using Paypal, never leave large amounts in your account. Transfer the money out to your bank account. That way your money is insured by the FIDC and you have some assurance that the money will be covered if something happens to it. There have been a few instances where Paypal accounts have been frozen (most likely because someone used a stolen credit card number to pay you). If you don’t keep large balances in your Paypal account, then you cannot lose large amounts of cash.
Be sure to check your account every time you log into Paypal. When you are expecting a payment, make sure that your account balance is what you think it is. If not, check it out right away and get things squared away.
Be careful of some scammers who try to use the Paypal name, or some variation of it, to get personal information from you including your Paypal password. Scams asking you to confirm your credit card number or your Paypal password end up wiping your account dry. So do be careful when giving your account numbers and passwords out.
So get registered and open a Paypal account and start using the Internet like a real pro. It is not hard to use Paypal and it only takes a few minutes to register and a few minutes to read through the user agreement. Go ahead and become a real online guru.
Article By Karla Soule, June 2004.
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