PayPal is now the recognised payment system for the internet but how does it work and what can you do? This is our guide to PayPal including setting up an account, sending or requesting money, explaining fees and more.
Set up a PayPal account
It’s no surprise that you’ll need a PayPal account in order to use the service. Head to the website, click Sign Up in the top-right corner and follow the instructions. You’ll probably want a personal account but there’s also a business option if that’s more suited to your needs.
We’ll be focussing on the personal account here which allows you do shop online, send or receive money and more.
You’ll also be interested in Monzo, the digital bank.
Add and bank account or card to PayPal
To make full use of a PayPal account, you’ll need to link it to your bank or a card you have. Without doing this, you can’t pay for items or send money.
If you didn’t do this during the account setup process then log into PayPal, click the Wallet tab at the top and click on ‘Add bank account’ or ‘Add a card’. With multiple accounts or cards on your account, you can easily choose which one to use during a transaction.
Note: You don’t need a balance to make purchases and you still collect any reward points associated to cards.
How to send money with PayPal
If you’re shopping online and want to use PayPal, simply select this option if it’s there when you check-out and follow the instructions.
There are plenty of other ways to send money, though and if you log into your PayPal account you’ll find them under ‘Send & Request’ at the top.
You can pay for goods and services or pay anyone in the UK or abroad using an email address, mobile number or name. Select the one you want and follow the instructions, bearing in mind that in the recipient will need PayPal account or will have to create one.
PayPal also has an option to send funds as a gift complete with a digital greetings card.
How to request money with PayPal
It’s just as easy to request money on PayPal so head over to the ‘Send & Request’ tab at the top to see your options.
You can request money from anyone via their email address or phone number or create an invoice if that is required. The third option is to use a more recent feature called a PayPal.Me link.
This is a customised link you can send to anyone with minimal hassle, the person simply needs to choose how much they owe you. Visit PayPal.Me to set it up.
How to withdraw money from PayPal
If you’ve been sent money via PayPal, this will show up in your account. If it’s not displayed by default, click the ‘Summary’ tab and you’ll be able to check your PayPal balance as well as see your recent transactions.
Withdrawing money from PayPal is easy, all you need to do is click ‘Withdraw money’ underneath your balance and follow the instructions. You can withdraw however much you like, to whichever bank account you like.
You can also add money to your PayPal balance if you need to top it up to pay someone. Simply click ‘Add money’ underneath your balance.
Although it’s free to have a PayPal account and use it to buy things or send people money, the firm has to make some cash somehow.
You’re probably wondering “do I get charged to receive money through PayPal?” and there’s no simple answer.
For typical transactions you won’t get charged, as long as the transaction is funded by the sender’s PayPal balance, bank account or debit card. However, if you use a credit card to send money, a fee of 3.4 percent, plus 20p applies.
The same is true if you sell something on eBay and receive payment to your PayPal account. For example, selling an item for £100 means you’ll receive £96.40 – and don’t forget you’ll need to pay eBay for the sale, too.
Read more about PayPal fees.
Use the PayPal app
A modern banking company wouldn’t be very modern without an app and you can get the PayPal one on Android or iOS. It’s got most of the features you get on the website and for most will be a more convenient way of sending and receiving money.