E-wallet briefly explained: how does PayPal work?

How does PayPal work, you are probably asking yourself if you want to create an account with this e-wallet and use it to pay in an online shop, on eBay, eBay classifieds or for purchases in the Facebook sales group. PayPal himself writes that when registering, you enter your bank account and / or credit card details once and then simply pay with your email address and a password. If this explanation of how PayPal works is not enough for you, I have a few more explanations for you.

How does PayPal work? Register, create an account, transfer the credit and then pay on the web? Explanations and more information can be found here!

How does PayPal work? Register, create an account, transfer the credit and then pay on the web? Explanations and more information can be found here!

Who or what is PayPal?

Before I go into the exact background to the use of PayPal, first a few information about the payment service on the Internet: PayPal was founded in 1998 and serves as an e-wallet, i.e. as an electronic wallet. The administration of money or payment on the Internet should not only be made easy with PayPal, it should also be made secure. Today, security results not only from the little data that the seller receives, but also from buyer protection. For example, there are mechanisms that ensure that a buyer gets the money back or the payment can be reversed in the event of fraud or failure to receive the goods from PayPal. So security and consumer protection. In Q2 2017, PayPal had registered 210 million active user accounts.

How PayPal works: step by step

For the user, PayPal basically works very easily. For the sake of simplicity, I've made a list with the individual steps. After this explanation, I will also give you a little insight into the payment processes, i.e. the flow of money and information that takes place when paying with PayPal. But first the steps for customers:

  1. Log in and create a user account
  2. Set the email address and password for payment
  3. Enter personal data and bank data from bank account / credit card
  4. Deposit / withdraw credit
  5. Pay with PayPal

Money and information: who has which data?

If you have set up a PayPal account and use it to make payments in online shops, on eBay, for private purchases or sales, etc., then only a small amount of information is sent to the seller. Basically he only gets your email address, which you use for PayPal, and other important information for the sale. The highlight: if you were to pay by bank transfer, direct debit or credit card, the seller would get that specific data. This does not happen with a PayPal payment. Only the money flows from you to the seller via PayPal; for the bank details of is halfway to the end;)

Send and receive money with PayPal

You can use PayPal on your Mac or PC via the page linked at the top. If you want to use the online payment service with your iPhone or iPad, there is of course a suitable one iOSApp. You can find the download in the Apple App Store or on your computer on the iTunes page:

[appbox appstore id283646709]

What does it cost?

Signing up and creating an account with PayPal are free. However, paying with PayPal is not always free. The payment service takes a commission on payments from relevant retailers, service providers and other providers on the web. The PayPal account does not work free of charge for merchants. But you as a consumer can also run into costs, namely when the providers transfer their commissions to your PayPal invoice:

  • Merchant fees for sales / receiving money via PayPal (in the EU): 1,9% + 35 cents per payment
  • Small payments up to € 5 are charged at 10% + 10 cents per payment
  • Donations are treated differently again: 1,2% + 35 cents per payment

So this is how PayPal works!

I hope this post has helped you answer the question "How does PayPal work?" The PayPal account basically works like a wallet when buying cash on the Internet: the seller sees that you have money and which wallet you are using, but he does not know anything about the source of the money, the bank account, your bank details, etc. .;) The large number of users and the role as market leader ensure that PayPal is also always screwing on security, data protection and the like, so that sending money on the web remains safe. Do you have any questions or comments on the topic? Then please leave a comment.

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