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What is PayPal and how does it work?

5 Mins read

You can learn more about PayPal and the advantages of using this online platform to pay for things.

Among the most innovative inventions of the past twenty years, PayPal is perhaps the most powerful online payment service. 

Launched in 1998, it is literally revolutionizing the online payments industry. Paypal allows you to pay with an e-mail address and password, or a mobile number and PIN code. 

It takes only a few clicks to ensure the safety of your online purchase, safeguarding you from the feared phenomenon of cloning your card with its attendant problems. There are now clothing stores and restaurants that sell their services online, in addition to home delivery and train tickets.

Besides allowing financial transfers, PayPal offers many other advantages as well. Furthermore, with its worldwide popularity, PayPal is an indispensable service. This article explains how it works and how to activate your account.

What is Paypal?

As you might anticipate, PayPal is a digital platform that allows for you to purchase things from thousands of e-commerce websites without having to type or communicate your credit card details. In this section, we will discuss the different kinds of transactions that take place.

Pay online worldwide with PayPal

The growth of online shopping and the availability of smartphone apps allow you to shop anywhere and anytime. 

Did you ever fear entering credit card or bank account details when finding a product/service you wanted? The need for security has led PayPal to create a payment system that requires only an e-mail.

One of the main differences between credit cards and other payment methods is the requirement to include sensitive and personal information. First and foremost, all of the number, expiry date, CVC/CVV (security code on the back of the card), and name of the cardholder. The checkout phase of all online shops participating in the circuit allows you to use PayPal just by choosing it among the different payment methods.

Once you have entered your email and password, you can complete the purchase. Another advantage is that you can buy or sell in your own currency. Payments are processed for PayPal in 25 different currencies and in more than 200 markets. 

There is an automatic conversion and a commission is applied if you use a currency other than your own. This is always communicated clearly and transparently by the company, and the fees for conversion are shown on the website.

You’re protected with PayPal when you buy online

One of the value-added services of PayPal is its protection of your purchases. You are protected by this guarantee in cases where the item is not delivered or the seller describes it differently, or the item arrives broken. 

PayPal reimburses the user in these circumstances for the total amount of the product/service they purchased, plus the shipping charges, if applicable.  In order to claim the PayPal Purchase Protection, the PayPal account must be in good standing and the dispute must be initiated within 180 days of the purchase/payment. Sellers can also claim this protection.

Protection of PayPal accounts

The most important thing is that PayPal keep their customer’s financial data and information protected at all times. It continuously monitors all transactions to prevent fraud, phishing emails, and identity theft from happening. 

There is a lot of investment in advanced cryptography systems. Users just need to contact Customer Service if they find suspicious activities on their account, and the Security team will intervene swiftly to carry out the necessary checks.

The company will never ask its users to share passwords or personal data. In most cases, Customer Service will block such activities and contact the user to enhance the security of their accounts. Your access data will always be safe with the company.

Send money through PayPal

No matter whether you want to pay for something you’ve purchased, split the bill with some friends for dinner, or send money to friends or family, PayPal is the best choice.

  • Payments can be made by entering an e-mail address from the seller;
  • Money Box collects money through personalized pages. In practice, whoever receives the link is invited to engage in a range of group activities (gifts, trips and many more);
  • Transfer money securely by using the new Xoom service. It lets you transfer money directly into bank accounts and international collection points.

Request payments via PayPal

If you have to convey money to a customer or send an invoice to a friend, you can do two things with PayPal:

  • it is possible to create a Paypal.me link that will be shared with the person for refunding you, so they just need to click on the link you sent and enter the refund;
  • PayPal lets you request payment by sending an email or sending a text message to the recipient’s phone. If you send an invoice via PayPal, you can make it your own and send it to your clients as a proforma.

Paypal’s prepaid card

Besides offering its account, PayPal also provides a prepaid card that can be used to make safe purchases both here in Italy and throughout the world. The card belongs to one of the world’s largest prepaid card networks, namely Mastercard. 

If you already have a PayPal account, you can use it as a payment method for online purchases. It is possible to make and receive transfers on the Internet via the Internet and the PayPal account, as well as paying at Lottomatica convenience points.

Setting up a PayPal account: personal or business

A PayPal account can be made by both personal and business users by simply going to the PayPal website and clicking on the Register button at the top right. Select whether you want a business or personal account and click Continue. This will open a second form where you can fill out your name, email address, and password. Click on Continue to the next step.

You’ll be asked for your latest personal info, like your address, birthday, and phone number. To create your account, you must accept the terms of service, the privacy policy and confirm your age. 

PayPal will ask you to verify both email addresses and mobile numbers, simple operations that take a little time. The next step is the association of a credit card or bank account that you may also delay at a later time by clicking on the appropriate item. 

You won’t be able to withdraw or deposit money from the account unless you use a bank account or a credit / prepaid card.

How to link a bank account or credit card

You can link credit cards or prepaid cards to your account by logging in and choosing the menu item “Wallet” then “Link a card.” Please follow the steps to do the link. 

An important step is the confirmation of the card which takes place with a charge of 1.50 currency value of the respective country and simple verification.

You will see a four-digit code preceded by the letters “PayPal” or “PP” in the account statement. Confirm the card by logging in, clicking on Wallet, the PayPal code, and clicking Confirm. Refunds will be processed within 24 hours of completing the operation. Follow these steps to link a bank account:

  • log into your account;
  • click on the Portfolio menu item;
  • Then, click on the link a card or bank account;
  • click on a link a bank account;
  • follow the instructions.

Please make sure to enter the name and surname exactly as they appear on the bank statement. The next step is to confirm the account. To confirm your PayPal account, you must write down two small credits previously issued by PayPal. As a result, you’re able to pay for transactions with your PayPal account by using your bank’s account.

Do I have to pay a fee to top up my PayPal account?

From the corresponding current accounts, money can be reloaded into the account.  Under your PayPal balance, under the “Transfer money” section, you will find “Transfer money”. By choosing it, the option “Update your balance” will be displayed. All you have to do is say how much you want to pay, choose the linked account to use, then confirm the process.

PayPal has the following advantages.

  • creating a free online account;
  • only the rates PayPal clearly communicates to buyers before executing the transactions apply to the exchange rate, money transfer outside the European Union, etc.; no management costs and commissions,
  • an efficient transaction;
  • high-level encryption systems provide maximum security;
  • the platform and app is friendly and intuitive to use for novice users;
  • 24/7 customer support service.

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