What is PayPal&Trade;?

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  • Written By: Hillary Flynn
  • Edited By: Bronwyn Harris
  • Last Modified Date: 29 August 2019
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PayPal™ is a business that utilizes e-commerce tools to enable individuals and businesses to securely process payments and transfer funds via the internet. It was created in 2000 when two companies, Confinity and, merged to further develop their email payment programs. By 2002, the preference of eBay customers to use PayPal™ in lieu of eBay's in house payment processing program prompted the online auction giant to make an offer, and PayPal™ has been operating under the wing of eBay ever since.

PayPal™ enlists the aid of several protective measures, including data encryption and security tests to ensure the safety of customer information. All financial data is stored on secure PayPal™ servers, so customers can initiate financial transactions without ever providing the merchant or recipient with sensitive account information. Once a customer sets up an account, they need only supply an email address to process a payment. The information is sent to PayPal™, then PayPal™ sends the payment to the merchant, never exposing customer information.


Individuals can set up a personal PayPal™ account, which can be linked to a credit or debit card as well as a bank account. A personal PayPal™ account can be used to shop securely at online stores, send or request money from friends or family, and also to receive money. Thousands of online stores now accept PayPal™, and PayPal™ offers a virtual credit card number for those that don't. To withdraw funds accrued on an account, the individual may choose to transfer the funds to a bank account, use a PayPal™ debit card in stores, or request a check.

Businesses have even more options. PayPal™ can be set up to receive website payments at an online store, or to request money by sending a detailed invoice. Email invoicing can be set up to receive just PayPal™ payments or the merchant may choose an account that allows direct payments from credit or debit cards. Each account type has different stipulations, but there is usually a small fee involved in accepting payments.

The ultimate PayPal™ option is the virtual terminal. This serves as an online alternative to credit card swipe machines used in stores. The virtual terminal allows vendors to accept payments over the phone and by fax as well. Merchants utilizing this service can expand their businesses beyond the virtual world and increase their customer base. The virtual terminal also generates automatic packing slips for shipping and creates reports for tracking sales and payments.


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Post 5

PayPal is widely used in U.S., Canada and Europe but other countries haven't gotten quite used to it yet. I live in Asia and it is so difficult to find Asian stores online that accept PayPal.

I wish it would be adopted by more international stores. My job pays me through paypal and I'd rather buy stuff directly with that, rather than transferring it to my account and using a credit card. Maybe it will change in the next couple of years.

Post 4

I love paypal! I sell used items online a lot and receive payment via paypal. It's such a great way for average people like me to have a safe way to manage earnings. If there wasn't paypal, I don't think I would have ever tried selling anything online.

It's also a good alternative to transferring money. I send money to my brother regularly and both banks and western union charge money for it, paypal doesn't.

Post 3

My credit card number was stolen last year, I think through an online site that I shopped with. It was a really bad situation and I had to cancel my card altogether.

Ever since that incident, I've started using paypal and only use online stores that accept paypal payments. I'm very happy with it, the payment process is easy and fast.

The only aspect I would like to see improved is the money transfer time from bank accounts. It takes five days for it to transfer money into my paypal account. I think that's too long. They do have an option of adding a credit card onto the paypal system to avoid this, but I haven't gotten around to doing that yet.

Post 2

I feel this article explains a lot about what Paypal is. I have heard the good and bad of what Paypal has done but so far so good for me and my dealings with them.

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