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What is PayPal?

© Maureen Fleury

My impression of PayPal* is very favorable because it offers an array of services to both personal and business accounts. Although I've only used it for paying for merchandise at eBay, I've only scratched the surface of the functionality. You can send or request money and even use the services to accept online payments on auction sites or your own web site or online markets.

PayPal is popular because most of the services are free. Incoming payment processing is chargeable for business accounts. The Business Standard rate is 2.9% of the purchase + 30 cents. The rate for Business Merchant is 2.2% + 30 cents. Preferred Accounts are charged 1.4% + 30 cents (Standard) and 0.7% + 30 cents (Merchant). Personal Accounts may receive payments but are limited to $100 in credit card payments per month.

Paying for merchandise is a free service for everyone and that is a definite advantage. By the time you add on shipping charges, you can end up with a hefty set of fees! The free outgoing payment charge makes this service very attractive.

What are some of the other goodies?

You can build up funds in your PayPal account and earn dividends on it. The rate is based on the money market and the dividends are deposited into your account monthly. If you are short on cash in your bank account, you can withdraw funds and deposit it back into your bank account. US Customers are not charged for withdrawals, but International customers are charged $1.25 per transaction. Some international members (depending on the country) can open a US bank account and have the funds transferred there at no charge.

Premier and Business members can send out bulk payments through PayPal. This is ideal for companies who are sending out rebates or affiliate rewards or pay-to-surf rewards. The funds are deposited electronically into the customer's PayPal account. Webmasters and vendors can earn money through a referral program. By putting a PayPal logo on their website, they can earn $5 for each person who clicks on the logo and completes the new account bonus requirements form. If you are a US customer, you will receive $5 for signing up with PayPal and depositing $250. In addition, US customers will receive $5 for referring a friend to sign up.

If you have a mobile phone on a wireless network, you can send money, check your balance and view your transactions. This is good for people who are on the go or are travelling.