How Does a Paypal Account Work?

Signing Up

Go to the Paypal homepage (see resources). Click on the "Sign Up" button. Signing up for a Paypal account is free, however you must have an email address. In addition, you either need to link your account to one of your credit cards or to your bank account. You do this by inputting your credit card or bank information. Paypal then deposits a few cents into your bank or credit card account. Confirm this information, within two days of receiving the deposit amounts, to verify the account. You will need to choose one of the three types of accounts: Personal Account, Premier Account, or Business Account.

Choose a personal account if your needs are basic. A personal account allows individuals to send and receive money from anyone with an email address. Personal accounts are limited and are for people who don't plan to make a lot of transactions. These personal accounts only allow you to send and receive a certain number of payments per month, and not totaling more than $500. This is done to ensure that people are using the account for personal reasons and not business reasons. Anyone who wants to participate in more transactions must upgrade their account. Fees are only acquired when individuals receive payments from a credit or debit card.

Choose a Premier Paypal account if you plan to send and receive an unlimited amount of payments. Premier accounts are a step up from personal accounts and are perfect for individuals who spend some time selling auction items. Premier accounts can also be used by small businesses as they are capable of sending out mass payments. Account holders can also set up subscriptions for recurring payments. Premier accounts get access to a toll free customer service number for handling and questions or concerns. Fees are charged to sellers, but not buyers.

Sign up for a Business accounts if you would like to have your account set up with a business name. Business accounts have all of the same features as Premier Paypal accounts, but users can set up their account under a business name which is great for tax purposes. Business accounts can also be set up to allow other users to access and use the account such as business partners or employees. This may be needed when a business owner goes away on vacation and needs someone to send out paychecks. Business accounts are also given tools for auctions and websites. Fees are still taken when items are sold, but not bought.

Use Paypal to conduct safe and secure financial transactions online. Paypal has an encryption service that is one of a kind. This means that whenever you make a transaction, your personal information is kept totally private. You can even send and receive money to anywhere in the world.

On the flip side, some individuals have spoken out against Paypal, charging that the company shut down their accounts and froze their funds without just cause. Paypal can do this if they feel that you are conducting fradualant business or if they think you are participating in an MLM program. It can take up to 180 days to get your money back and you may never access to your account again. It is suggested that you withdrawal all of your money as soon as it is deposited. That way if your account is frozen you will not be out any money.