PayPal

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Adam Shields Sarah Purdy

What is PayPal?

PayPal is an online payment service that allows individuals and businesses to transfer funds electronically. The idea behind PayPal is simple, it uses encryption software to allow people to make financial transfers between computers.

PayPal is now one of the world’s primary methods of online payments. Although occasionally PayPal does have a few faults, such as fraud, lawsuits and zealous government regulators. PayPal now boasts over 100 million active accounts in 190 markets worldwide.

• • • • The main uses for PayPal are: Send or receive payments for online auctions Purchase or sell goods and services Make or receive donations Exchange cash with someone

How does PayPal work?

PayPal is an online financial transaction broker, PayPal lets people send money to each other's email addresses. During the transaction at no time will either party see the other's credit card or bank information. In order to use PayPal the only requirements are a valid email address and valid credit card or bank account.

• • • • • • PayPal has three account types: Personal, Premier and Business. All these account types can use the following core PayPal functions: Sending money Requesting money Using auction tools Making payments from a Web site Debit card services Customer service

Advantages to PayPal

• Credit card security - When signing up for a PayPal account, a user types in the credit cards and bank accounts they wish to use for purchases one time on the PayPal secure system • Flexibility - PayPal relieves users of the embarrassment and hassle of trying to purchase goods and services online to then have their credit card declined.

• Send money - Whether sending money to a child at college or a friend in trouble across the globe, PayPal users can instantly transfer money to them by simply clicking a mouse. • Online Auctions - How could anyone talk about PayPal without mentioning eBay? PayPal is integrated with the online auction powerhouse, users can place bids and make purchases safely.

• Discounts -

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PayPal sponsors special discounts for customers that shop with PayPal at selected retailers. Users who visit www.paypal-shopping.com can find the latest special offers from popular companies such as HP, Nike, etc.

Disadvantages to PayPal

• Time - PayPal is somewhat time consuming to set up. You need to verify funds they deposit into your bank account. If you don't have immediate access to that information, it could take weeks to get your statement. • Fraud - PayPal is very vulnerable to fraud. If someone cheats, it's you as the seller who'll be paying the price when it happens (and it will), either by losing the money or getting your account frozen. • Customer Service - PayPal is famous for their lousy customer service (or lack thereof). This includes hiding their phone number and only sending out automated responses to emailed queries. • Refunds - If someone complains to PayPal about a product you delivered to them, they get to keep the product and you still have to refund the money. • Accounts - PayPal has a large number of people who hate it-- most of them people who've had their accounts with thousands of dollars frozen and had to try and chase PayPal for months to get it back, if ever. • Merchants - Many people consider PayPal a merchant account for online business amateurs, and believe that professionals have a "real" merchant account

• 88% of PayPal customers are under age 55, compared to 74% of non-PayPal customers • 16% of PayPal customers reported income of £46,000 or more, vs. 12% of non-PayPal customers • 15% of PayPal customers reported having finished graduate school, vs. 11% of non-PayPal customers PayPal is a growing investment and is the main use by younger generations. This means that in the future PayPal could become the most popular use of transactions, or the only one. Depending on whether or not technology creates something even more advanced. as PayPal is so popular though it is likely to just be developed.

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