What is PayPal and how does it work?

PayPal is one of the most established and used digital payments systems. 

It's is an online financial service that enables you to pay for items using a secure internet account. You simply add your bank account, credit card or debit card details and whenever you pay using PayPal, you can choose which of your cards or accounts it pays with. You can also set one to be the default payment method and that will be used unless you choose otherwise.

Many online retailers allow you to pay using PayPal, even in three monthly instalments.

In addition to paying for items using PayPal, you can also receive money through the service. Any money received sits in your PayPal account and can be used when paying for something, with the balance topped up by your assigned cards or bank account.

Alternatively, you can transfer the money to one of your assigned bank accounts or cards. There can be a fee applied when you receive money to your PayPal account, but it's largely free to use when buying something.

It is free to transfer money to friends or family through PayPal accounts too, as long as there is no currency conversion required.

There are business PayPal accounts available too, which you can find out more about here. PayPal enables many businesses to accept card payments which they were unable to previously.

PayPal also runs its own credit card-style facility for users, with the option to pay for products using credit to pay back later.

Why use PayPal?

While there are plenty of online payment systems these days, such as Apple Pay and Google Pay, PayPal offers a few additional benefits that others might not.

To begin with, its age means it is well established and widely accepted, even from smaller etailers. You will find a Pay by PayPal option on thousands of websites that do not offer the same for Apple Pay or other digital financial services.

Its buyer protection safeguards will also ensure you get a refund if an item you buy online doesn't arrive or doesn't match a seller's description.

Those selling items on a personal or business level and are paid through PayPal are also protected. For example, if you can provide proof that you sent an item by post yet the buyer claims not to have received it, you get to keep the full payment.

Another reason to use PayPal is that it offers an additional layer of security to payments. As you do not have to enter your card details or CCV number each time you purchase something, just your PayPal login and password or mobile number and PIN, the online store does not have your details in its database.

Sometimes you can also use OneTouch payments, where PayPal keeps you logged in if you activate the service and you do not have to enter your details each time you purchase something, no matter which store. That's because it is specific to a device and browser. For example, if you enable OneTouch on your PC, it will only work when you use that specific computer and the same browser.

There are dedicated PayPal apps for iPhone and Android devices - each with biometric security for extra protection.

How do I get a PayPal account?

It's easy to sign up for a PayPal account. You head to PayPal.com and click the Sign up button. It'll ask if you want to sign up for a personal or business account and away you go. Don't forget to have your bank, credit or debit card details to hand though.

How to pay with PayPal?

PayPal works online and in stores through a browser or mobile application. There are dedicated apps for Android and iOS.

When paying online, you just need to look for the PayPal symbol and check out by following the simple instructions on screen. The apps do more though.

Thanks to many partnerships with stores and restaurants in your area, you get different options of how to pay for products, food or petrol, even order ahead to beat the queues in some food establishments and coffee shops. The app shows you a list of all the vendors nearby that accept each of the different PayPal options.

You can also add loyalty cards to your PayPal account, in order to gain loyalty points whenever you pay for something using the app. 

What is PayPal Credit?

PayPal also runs its own credit service, where you can pay for items using PayPal but pay from them later. It's a lot like a credit card although you don't require an actual card.

It charges a typical (variable) purchase interest rate per annum, much like any credit card or loan, but as an incentive, you get 0 per cent interest on purchases of over 99 Euros for four months. So if you pay it back within that time, it won't cost you more than the original purchase price.

Some stores offer special deals when paying for products using PayPal Credit, with reduced interest rates depending on the retailer.

Source : https://www.pocket-lint.com/apps/news/138438-what-is-paypal-and-how-does-it-work