PayPal, the complete guide to the digital payment service: what it is, how it works and how much it costs

PayPal is a digital payment service that allows the money transfer via a wallet (i.e. a virtual wallet) connectable to debit cards, credit, prepaid And bank current accounts. Registered users will be able to use PayPal as an intermediary who guarantees the security of payments through full refund in the event of unforeseen events or disputes.

What is PayPal

The company was founded in 1999 by Max Levchin, Peter Thiel, Luke Nosek and Ken Howery who were part of at the time Confinity. The following year it merged with X.coma banking services company founded by Elon MuskIt is in the 2002 is acquired by eBay. The service landed in Europe in 2007. It is currently a company quoted at the stock exchange on Wall Street and operates in our country as credit institutioneven if it does not offer current accounts but only an online wallet.

How PayPal works and how to register

PayPal functions in all respects as an intermediary for economic transitions between one natural person and another and/or with physical stores. It is available from both app what a way web, therefore it is possible to access your profile and manage cards and payment methods from both mobile devices and browsers. To start using this service you need signing in by creating an account linked to an email address in which yours will be entered personal data and a card (prepaid or credit/debit) or a current account. Registration is free, so joining PayPal has no costs. Once you have added a payment method to your PayPal wallet you will need it confirm ownership: to do this a small sum will be charged to the added payment method (a few cents) and there will be a in the payment details unique code which will be inserted into your account to verify its legitimate ownership. Following the verification, this sum will be returned to the owner.

Here is a summary of the steps to take register for PayPal:

  1. download the PayPal app (from a mobile device) or access the website (from a browser);
  2. use your email/phone number to create an account;
  3. select a payment method (card or account);
  4. confirm ownership of the payment method via a code.

How to pay with PayPal

Once you have enabled a payment method on PayPal it is possible pay (and get paid)on sites that support it, via the account credentialstherefore without entering any data relating to your card.

Within our account the wallet balancewhich does not correspond to the balance of the added payment methods: the PayPal balance refers to the economic mountain present on PayPal itself. In fact, it is possible to move funds from cards to the general balance and vice versa. To top up your PayPal balance, simply move an amount from your current account by choosing “Transfer money” and “Top up your balance”.

To pay money to another natural person via PayPal, simply select the email address of one of our contacts who has a PayPal account, enter the amount you want to pay and select the reason “Friends and Family”. For this type of payments no commissions are applied. Since it is technically one donation, there is no possibility of opening a dispute to the PayPal team. For this reason, it is strongly discouraged to use this method to purchase goods online from private users.

PayPal Friends and Family
Credits: PayPal.

For them negotiations between private individuals a different reason is foreseen, called “Goods and services”which requires the payment of a commission and allows you to contact the PayPal helpdesk if something goes wrong (for example packages not received, items damaged or not as described).

For amounts between €30 and €2000 the service offers the possibility of requesting the payment split in three brackets thanks to the option “Pay in three installments”with a deposit and two monthly installments.

How much does PayPal cost: the fees

As already mentioned, opening a PayPal account is free and for payments there are no commissions for the reason “Friends and Family” as long as the money transaction is in euros (otherwise the exchange rates will be applied) and the transition takes place within national borders (otherwise the fee depends on the country where the payment must arrive). For receiving money following a sale, PayPal will have a withholding of 3.4% (1.8% if it is a non-profit organization selling) to which they must be added €0.35 per transaction.

What are PayPal's security systems?

All type transactions “Goods and services” they can count on purchase protection: PayPal acts as an intermediary in the transaction to offer, if the buyer demonstrates having received a damaged or non-compliant item, a full refund.

There is also a strong focus on the part of the company online payment security: all transactions are monitored in order to avoid illicit transactions.

Finally PayPal offers a dedicated helpdesk who can be contacted at green number present on the official website.

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