How Does Sending Money Through PayPal Actually Work?

By 2023, more than 6.1 billion people will be using digital payments to shop, pay bills, and lend or borrow money. Currently, the need for new and better forms of digital payment is more important than ever before.

Since 1998, PayPal has become the leader in trusted digital payment services all over the world. The company has risen from a niche concept to a mainstay for most online retailers. Originally, PayPal started on eBay. PayPal has also become one of the fastest and easiest ways for individuals to send money to one another. How does sending money on PayPal work?

PayPal securely links your bank account and credit cards to your user account. Using your computer, tablet, or smart device, you can send funds to friends or family. Enter their email address or cell phone number into PayPal, indicate how much money you would like to send, and press ok.

PayPal will notify the recipient after the money has been transferred. The money will go directly into their PayPal account. The money can be transferred into their own bank account. If an individual doesn't have a PayPal account, they can open one for free.

There isn't a fee for sending money domestically to friends and family on PayPal as long as you use your linked bank account. However, any money sent through a credit card is subject to a charge of 2.9 percent with a fixed additional fee of $0.30 tacked on at the end.

Most funds usually appear in the recipient's PayPal within two or three days. If you have already preloaded funds into your PayPal account before transferring the money, it could be there in as little as a day.

Like any digital interface, PayPal isn't immune to an occasional hacker or scammer. Several scams in the last few years have targeted PayPal customers. The people behind these scams use email, phishing sites, malicious ads, and suspicious links to trick PayPal customers into providing private information about their accounts. However, PayPal’s secure service has safeguards in place to protect your money.

Scams or no scams, PayPal prides itself on the security of its servers, according to a report from TheStreet. If you are the victim of an internet scam, PayPal will contact you. The company will usually reimburse you for the missing funds after it discovers the offender.

People continue to use PayPal because of its commitment to security, customer service, and the easy exchange of money for goods and services. The company is a critical component in the digital money transfer space.