How Does PayPal Work?

PayPal logo

If you’ve ever bought or sold anything on eBay, then you probably already have a PayPal account.  If you’ve ever bought anything online, then you probably should have a PayPal account.  Some people shy away from the whole thing because the thought of giving credit card information to a company is scary.  This just means you don’t understand quite what PayPal is.  So let me explain.

PayPal is a simple and secure way to pay and be paid.


Go to and create an account by entering in your email and password of choice.  You will then need to enter your personal information.  Your information is safe and secure.  This safety is one of the reasons you want to use PayPal.  You’ll also need to link your money to this account.  You do this through entering any credit cards you may want to use to pay, and your personal bank account.  Depending on the credit or debit card, you may be charged a fee.  If you use a checking account, you will not be charged any interest or fees.  To link your checking account you’ll need your bank account number and routing number.  Paypal will deposit and withdraw some money from your account and ask you to tell them the amounts in order to confirm you have given the correct one.  For example, they may deposit 57 cents and withdraw 46 cents.  This process will take a few days.  I recommend linking your bank as soon as you can so that when you decide to use PayPal you are all set.


Most online companies have the option of using PayPal at checkout.  This means you don’t have to enter all of your information into any new websites because PayPal takes care of it all.  If you select “pay with PayPal,” you get redirected to the PayPal website, enter in your username and password, select which card or account to pay with, and you’re done.  Secure.

You can also send money through the website or app (available on iOS, Android, and Windows) by using an email or phone number.  There are no fees if you are using these services to pay “friends and family,” but for business transactions there is a fee of 2.9% + .30 cents per sale.  You only pay fees if you sell.

To pay somebody just click “Send Money” in the app or on the website.  Enter their email or mobile phone number, the amount, and select Friends and Family or Paying for Goods and Services.  The recipient will receive an email or notification that they have been sent money.  They’ll need to log in to their account, or create an account if they don’t already have one, and accept the money.  If they do not create an account in 30 days, your money will be returned to you.

Get Paid

PayPal accepts all forms of payment.  So if you are offering goods or services to be paid for through PayPal, you also accept all forms of payment.  You can give somebody your email or phone number to have them send you money.  Or, you can send them a request to be paid.  To do this, just click “Request Money” in the app or on the website.  The options are to Create and send an Invoice, or just request a payment.  By entering email or mobile numbers, your recipients will be reminded that they owe you through an email or a phone notification.  They will have the option to simply click and pay if they have an account, or they’ll be directed on how to set one up.

Once somebody has paid you, the money will be in your PayPal account.  You can access your money by clicking the Withdraw button.  Transferring money to your checking account takes up to 3 business days, or if you request a check it takes up to 10.  You can also use this money to purchase any other goods and services.


PayPal is a safe way to pay online.  They’ve been the safe way to pay online for the longest, they use leading technology to protect your information, and they value and protect your privacy.  Read what they have to say about their security HERE.

The app has been receiving a lot of updates recently.  We now have the capability of paying with PayPal at certain brick and mortar establishments.  It’s not just an online thing anymore.  You can log in to the app to see which stores near you accept PayPal.  Depending on your location, you may be able to order and pay for your food directly from the app.

Is it useful?

Yes.  Here are 3 examples:

  1. You are out with a friend who purchased movie tickets in advance.  You want to pay them back, but you don’t have enough cash.  From your phone you can send them the exact amount you owe.  Done.
  2. Your son starts a lawn mowing business.  He is mowing certain lawns every week, but the owners often aren’t home at the time.  By sending invoices, the home owners are notified of what they owe and given the opportunity to pay immediately.  Your son accepts all forms of payment.
  3. You are shopping for the perfect birthday gift and find it on a website you’ve never used before.  You could enter in all of your credit card and personal information.  Or you could just pay with PayPal.  You’ll be done faster, won’t have to enter your information, and you don’t have to worry about the site security.

Our world is becoming wireless, and PayPal is helping with that.  The initial setup may seem annoying, but once it’s done you’ll find that PayPal has done nothing but simplify your life.  Pay friends from anywhere, purchase online without having to get your credit card out of your wallet, and stop stressing about the safety of your money.

Start now at

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