Examples and Benefits of Using Paypal
 Introduction
PayPal is a powerful money transfer service that serves as a convenient and fast
alternative to traditional cash, paper checks, and money orders. PayPal accounts
come in a few different types and you'll have the ability to fund your PayPal
account with an electronic debit from a bank account, a credit card or a debit
card.
Send And Receive Money From Anywhere with PayPal
You can also receive money from other PayPal users, and then turn around and
spend that money immediately. PayPal is often considered an eBay payment
service, but millions of individuals and companies use PayPal everyday for
settling all types of debts. There is a ton of ways to use PayPal, and I would
never begin to cover every possibility in this tutorial, but let us explore some
real world examples.
Examples of PayPal Uses
Let's say you are sending your son to college, and he would like to buy some
college textbooks, but he has run out of cash. You can instantly transfer money
to his PayPal account, and he will have the funds in a few seconds. He can then
use his PayPal debit card that's linked to this PayPal account, and buy those
books from the college bookstore. Perhaps you have decided that you would like
to buy a new computer, and you have some money sitting in your PayPal account
balance that you have received for some old antiques you have sold on eBay.
You
are browsing around on Walmart.com and you find the perfect computer bundle with
a monitor, a printer, and a keyboard, and a mouse; all the right things that you
need just for the right price. You see the PayPal logo, and you realize that you
have just enough money to buy that computer, so you add it to your shopping
cart, and you pay for it immediately with those eBay auction proceeds.
More Examples
One fun Friday night, you are out with friends, and you realize you have left
cash at home, and there is no ATM insight. Your co-workers suggest that you bump
the funds using the smartphone money transfer feature on your PayPal iPhone app,
and in seconds, you have $50, and your fun continues well into the night.
Another great example would be for your business. You have been after your best
client to pay for an old invoice that has been lingering around for way too
long. He mentions that he is prepared to use a credit card but you do not have
one of those expensive merchant accounts. and you are not about to get one just
for this invoice.
You suggest to him that you will send him a PayPal invoice
through e-mail and he can enter his credit card details. He can then pay for
that invoice in a few minutes without ever having to sign up for a PayPal
account.
PayPal Provides Real Benefits
These are some of the very real and likely ways that PayPal can integrate into
your daily life. You also have the ability to create payment buttons that can be
added to your Web site for selling individual products, or receiving money for
virtually any reason.
For The Business User
 Setting up a shopping cart is a very simple step for a programmer, so that you
can sell online, and offer PayPal as a method of payment for your
online store.
You can subscribe to a virtual terminal, and then offer charge by phone, fax, or
e-mail options to your clients and customers so that you will have the same
credit card processing capabilities that larger companies have, without
investing one dime in equipment. You can create recurring subscriptions for your
clients and customers so that monthly charges are automatically collected from
their PayPal account without ever having to remember to bill them.
You can also accept donations for your charity if you operate one. Your
imagination is the only limitation here. PayPal is a super convenient cash
alternative for many situations. If you have a programmer, or you are one
yourself, you can accomplish many more cool tricks with PayPal and integrate it
into your applications.
The Different Types Of
PayPal Accounts
PayPal offers different account types for different types of people. I will
discuss each of the PayPal account types, and why you would use that particular
account type for your personal or business activities. To find the account
types, you can click on Sign Up button on the PayPal Web site, and you will be
presented with the main account types.
Personal PayPal Account
Let's first talk about Personal Accounts. PayPal offers a Personal Account for
individuals who shop online. A Personal Account allows you to send money to
individuals and businesses using their e-mail address. A Personal Account allows
you to receive payments from others, but the fees would be higher than with the
other account types that I will cover later.
A Personal Account would be ideal for someone who might wish to settle a
private debt, such as splitting a dinner check, paying rent, or any one of a
multitude of other reasons that you might need to pay someone. By adding a
credit or debit card, or using a bank account, you will be able to add funds to
your PayPal balance that you can then turn around and spend.
Premier PayPal Account
A Premier Account is designed for online sellers who are non-businesses, who
want to be paid online and make online purchases. This account also permits you
to receive payments from buyers who wish to be paid with a credit or a debit
card, but who do not already have a PayPal account.
You can also use a PayPal Debit Card to spend your money, and PayPal offers
you a large variety of merchant services to enhance the payment process for your
business. You would use this account type if you were not trading under a
business name, but that you use PayPal for a business of any size.
Business PayPal Account
A Business Account has all the same features as a Premier Account, but it
permits you to trade under a company name. If you do business under a name other
than your personal name, this is going to be the account type you'll want to set
up.
Generally speaking, you will need to be an officer, or have written
authorization from the company to set up a business account. For example, if you
are a volunteer for a local foundation, you probably would not have the
authority to set up a PayPal account for that charity. If you are the president,
the vice president, the treasurer, or secretary, or even a sole proprietor doing
business, then it would be appropriate to set up a Business Account.
A big plus for Business Accounts is the capability of adding up to 200
employees to your account with various levels of authority to manage your
account for you.
Student PayPal Account
A Student Account is not a separate account, and it is actually a sub-account
for a parent who would like to provide a teen or child with the ability to
receive money through PayPal, and then spend that money using a PayPal Student
Debit Card.
The Student Account acts like a Premier Account, but the parent controls the
account, the funding to that account, and the access to it.
Micropayments PayPal Account
PayPal also offers a little known Micropayments Account for businesses that
receive a very, very large volume of small payments. If your business typically
receives a lot of payments under $10 each, you will want to ask a PayPal
representative about this type of account. The fees are reduced, and you will
pay 5% plus 5 cents per transaction.
The way that the fees are reduced is that the transaction fee is lower than
it is with a standard account, although the percentage is slightly higher. So
for smaller payments, you will pay less in the end. PayPal has account types to
match any situation and needs.
In case you are wondering how many accounts you are allowed to have, PayPal's
policy states that you may only have one Personal Account, and one Premier or
Business Account at one time. Each account must have a unique e-mail address
associated with it, and unique financial information. You can upgrade an account
at any time on the PayPal website.
PayPal Fees
PayPal is free to buyers, and generally the seller pays the fees to use the
service. There are nominal fees that are in line with what you would expect to
find at most banks through their credit card and eCheck programs. PayPal is
superior in that you never have to pay a monthly fee unless you use one of the
enhanced business services that they offer.
The rates depend upon the volume you
are doing, and the type of transaction whether it's domestic or international,
and the type of account you have set up with PayPal.
No Fees Unless You Use It
The nice thing about PayPal is that you will never have to pay a fee unless you
are actually using the service. For purchases, the seller pays between 1.9%, and
2.9%, plus $0.30 per transaction. There are no monthly fees, there are no set-up
fees, and there are no gateway fees, so you do not have to pay for an expensive
terminal. The lowest discount available is for merchants who sell more than a
$100,000 a month and that may be in your future very soon.
Fees Outside The USA
 Cross-border rates are a little bit higher. A cross-border transaction is
defined as receiving payment from someone who is outside the United States. If
you would like to transfer money to a friend or a family member for personal
reasons, the Personal Transfer option will be totally free if that money comes
directly from your PayPal balance, or a bank account. The cost will be 2.9%,
plus $0.30 per transaction if that comes from a debit or a credit card, or is
sent to someone who has a PayPal registered address overseas. And at that point,
you can decide if you will pay the fee, or the person receiving the money pays
it.
I find that paying vendors and friends is quick and easy, and I almost always
elect to pay the small transfer fee myself. A good selling point for using
PayPal for your business is that it's popular and trusted.
Drawbacks With PayPal?
One of the main drawbacks of PayPal is that it's not available in every country,
if you are one of those unfortunate people who does not have access to it, then
you can check out these
PayPal
alternatives. The other main drawback is that PayPal does have a list
of rules one has to follow in order to use their system, while other
alternatives may be less lenient in the amount of rules they have. Overall
the uses and benefits far outweigh the drawbacks of using PayPal.
PayPal Can Save You Money
So many of your customers are going to have a PayPal account already. I can
assure you from personal experience that setting up a bank merchant account has
a lot of costs associated with it.
The machine that you have to buy in order to
accept cards can cost many hundreds of dollars, and there are always monthly
fees associated with it. You will never incur any of these fees to set up a PayPal account.
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