PayPal is an online payment service that enables individuals to transmit money to one another. PayPal was one of the pioneers of online payments and was acquired by eBay in 2002. PayPal was split off from eBay in 2015 and continues to operate as a separate publicly listed firm. PayPal is completely free to create and simple to connect to a bank account, debit card, or credit card in order to send and receive money.

PayPal is an online payment system that enables it safe and secure to make purchases online and to transfer and receive money.

After linking your bank account, credit card, or debit card to your PayPal account, you may use PayPal to make online purchases at participating merchants. PayPal acts as an intermediary between your bank and merchants, ensuring the security of your payment information.

Additionally, you may use PayPal to securely send and receive money from friends and family. This function is beneficial for dividing rent with roommates or receiving money for your birthday, for example.

How does PayPal work

PayPal acts as a middleman between two individuals (or corporations) wishing to trade money. There is no charge for sending money to friends and relatives. If you transfer money as part of a purchase or as payment for a service, PayPal will deduct a small processing charge from the total before passing it on to the receiver.

If you are a business owner interested in using PayPal as a payment method, you must first open a PayPal Business account. While a personal PayPal account may be used to sell items, if you operate a business and want to simplify your operations, a PayPal Business account may make more sense. Both types of PayPal accounts have anti-fraud protection, increased security, and transaction encryption.

How do I get a PayPal account?

It's simple to open a PayPal account. You go to PayPal.com and click the Create an account option. It'll ask you if you want to create a personal or business account and then you're done. However, don't forget to bring your bank, credit, or debit card information with you.

Personal PayPal accounts

A personal PayPal account is the most common account for individual use. It’s all you’ll need to send and receive money or to use PayPal to make purchases online. This account also lets you access your purchase history, link new bank accounts and add credit cards to your account.

Business PayPal accounts

PayPal also offers accounts that allow businesses to accept PayPal payments online as well as credit cards and debit cards online or in person, even if your customers don’t have PayPal accounts. Service-based Businesses and professionals can also send invoices to clients and receive PayPal online payments securely.

How to create a PayPal account

You can create a PayPal account from your computer or mobile browser or directly through the PayPal app.

Here are the steps you’ll need to follow:

1. Go to paypal.com or download the PayPal app from the App Store or Google Play.
Click the blue “Sign Up” button.
2. Select “Personal Account.”
3. Add your phone number and you’ll receive a text with a security code to enter on the next screen.
4. Enter your legal first and last name, email address and a secure password.
5. Then, enter your mailing address and agree to PayPal’s privacy policy. This will create your account.
6. Finally, add a credit card, debit card, or bank account to your PayPal account.

The Bottom Line

PayPal is one of the most widely used payment systems for online and peer-to-peer transactions. It is accepted by many online merchants and is becoming increasingly widely accepted at brick and mortar establishments.