If you know and use online payment methods, you’d already know about PayPal. However, if you don’t but want to use it, then the first question that pops up in your mind will be- “Is PayPal free?” The next one will be if it is safe to use or not. And, there will be plenty of other questions that you seek an answer for.
You will find all the answers in this post. Here, we will explain if PayPal is free, safe and if it has a transaction fee. Along with this, we’ll also cover the popular F.A.Q about PayPal.
What is PayPal?
PayPal is the most popular digital payments platform owned and operated by the American company PayPal Holdings Inc. The company was wholly-owned by eBay since 2002 but then eBay spun off PayPal in 2015 to eBay’s shareholders. Basically, PayPal is a worldwide online payment system that supports online money transfers and works as a digital alternative for traditional paper methods such as cheques and money orders.
It has more than 325 million active ‘account holders’ who regularly transact through PayPal via various methods such as the app, mobile, website, or in person. PayPal is available in more than 200 markets across the globe and allows the consumers and merchants to receive money in over 100 currencies. It also supports withdrawing funds in 56 currencies and hold balances in PayPal accounts in 25 currencies.
Is PayPal Safe for Online Payments?
The shortest answer to that question is YES. PayPal is absolutely safe for online payments. It keeps all your information safe. When you make a payment using PayPal, the receiver will not get your sensitive financial information like your bank account number or credit card number. Along with the encrypted sensitive information, each transaction is covered with the Secure Sockets Layer (SSL) technology with an encryption key length (128-bits).
Even before you register for an account, PayPal servers only allow you in when you are using security approved browser. Your payments with PayPal on any website are covered by the PayPal Purchase Protection service. Hence, it is an even safer alternative than your credit or debit card.
Image Credit: The Balance.
I’d also recommend that you should always know about the protection schemes before using any payment method, whether it is online or offline. So, you can prevent fraud and claim compensation if anything goes wrong. You can read PayPal’s Protection Scheme here.
Is PayPal Free?
This is one of the most asked questions about PayPal. The answer to it is not straightforward. PayPal is free but partially, and not completely. You can sign up for a PayPal account for free and use it for your purchases without any transaction fees. It charges a nominal fee on GST and a currency conversion processing fee when you shop from another country.
PayPal also charges fees for domestic personal payments using your credit or debit card but if you are using a combination of your PayPal balance and bank account, then the transaction is free. If you are a seller, then you’ll be charged transaction fees when you receive money for your sales.
There is also a fee when you send money to someone in a different country or when you receive money from a different country. There is no transaction fee for receiving money in the same country. And, for purchasing goods or services using PayPal, the transactions are free.
What is the Transaction Fees on PayPal?
PayPal is partially free to use and changes transactions only on certain orders. Here are the different transaction fees that you will have to pay on PayPal.
- PayPal also charges fees for domestic personal payments using your credit or debit card that is 2.5% of the transaction amount and a fixed amount (30 cents).
- To receive international online payments and invoices, it charges the following fees:
- If you are receiving funds from a different country, you will be charged anywhere from 0.4% to 2% of the amount depending upon the country.
- PayPal also has a chargeback fee of around 20$ if the sender reports the transaction with their bank.
- It also has a fee of around 3$ for failed withdrawals.
- For Sellers using PayPal as a payment processor, it charges a transaction fee at a usual rate of 2.9%.
- PayPal also charges a currency conversion fees that you can check by going to the Currency Calculator in Wallet.
The best thing about PayPal is that there are no hidden charges. You will see what you are paying for. So, you can opt to not pay anytime.
Most Searched F.A.Q About PayPal
Here are the most searched frequently asked questions (F.A.Q) about PayPal. You will get all your answers here so that you don’t have to look anywhere else.
Q: What are the main businesses of PayPal?
A: PayPal offers two main services as mentioned in their User Agreement:
- Export Payment Services- This allows you to receive payments from buyers for the export of goods and services outside your country.
- Domestic Payment Services- This allows you to receive or make payments for goods or services within your country.
Q: What type of PayPal Account should I sign up for?
A: PayPal offers 3 types of accounts: Personal, Business, and Premiere. You can choose any of them based on the services you need. Here is a complete comparison between them:
Q: What is the difference between Personal Payments and Online Purchases?
A: Personal Payments are the money you send or receive to your friends or family, while Online Purchase is when you shop for any goods or services through a website. Here is a complete comparison between them:
Q: How to Withdraw Money to my Bank Account?
A: To Withdraw money from your PayPal account to your Bank Account, follow these steps:
- Go to “My Account” and click on “Withdraw”.
- Next, click on “Withdraw funds to your bank account“.
- Then, enter your bank information and click on “Continue”.
- Finally, click “Submit”.
It will take around 5 to 7 days to transfer the funds to your bank account.
PayPal is a safe, simple, and very useful digital payment system. You can use it to send and receive payments, purchase goods and services, and also sell them. You can register for an account for free and use it. There are certain transaction fees that I have mentioned above. To know more about them, you can go through the PayPal User Agreement.
That’s all for this post. I hope you find it helpful. For any queries or suggestions about anything written here, feel free to use the comment box.