How to Use PayPal – WTOP News

What Is PayPal?

PayPal has the distinction of being the world’s first digital payment system — launching back in 1998 before apps and smartphones were even a thing. Today, it’s the leading player among an array of digital payment options, with 434 million users worldwide.

Most people use PayPal primarily to send and receive payments, and make purchases online or in stores. PayPal also offers a PayPal Debit Card and PayPal Cashback Mastercard, PayPal Later (which lets you split your payments) and a suite of small business solutions.

[Read: Best Savings Accounts.]

How Does PayPal Work?

PayPal allows you to make purchases or transfer money to other people online or in the app. You can use PayPal by creating an account and linking it to payment sources such as your bank accounts or credit cards.

When you receive money in your PayPal account, you can either keep the funds in your PayPal balance to use as needed, or transfer it out to your linked bank. A bank transfer usually takes one to three business days, but you have the option to do an instant transfer for a fee of 1.75% of the amount transferred.

Who Can Use PayPal?

To open a United States-based personal PayPal account, you must be a resident of the U.S. or one of its territories and at least 18 years old (or the age of majority in your state of residence).

You’ll also need to provide your first and last name, address and email address.

[Read: Best Online Banks.]

How to Send or Receive Money Using PayPal

You can send anyone money using PayPal as long as they have a PayPal account (or want to sign up for one).

1. Log into your account, and click “send/request.”

2. Enter the username, real name, email or phone number for the recipient. Make sure you have the correct account.

3. Enter the desired amount, with an optional note.

4. Click send.

If you have a PayPal balance to cover the amount, it will be sent instantly. If it is a transfer from your bank to the recipient, it will take a couple of business days. Transfers within the U.S. are free, except if you use a credit or debit card as your payment source. Then you’ll incur a 2.9% transaction fee plus a $0.30 flat fee. International fees may also apply if you send money abroad.

You can also request a payment from someone following the same steps above, but choosing “request” instead of “send.”

Receiving money through PayPal just requires that you have a PayPal account. Once you do, anyone can send you money as long as they have your username, email address or mobile phone. When you receive a payment, you’ll get a notification from PayPal. That money will be instantly available to you once it’s reflected in your PayPal balance.

How to Use PayPal on Amazon

When checking out on Amazon, PayPal is not actually a payment option.

However, you can get around this if you have a PayPal Debit Card or PayPal Business Debit Mastercard. If you add either of those cards as a payment source in your Amazon account, then technically you could pay for your purchase via your PayPal account.

How to Use PayPal Pay in 4

One PayPal feature that is widely available through participating merchants is its “buy now, pay later” option called Pay in 4. When offered, Pay in 4 allows customers to split the total transaction into four bi-weekly payments. There is no interest, no fees and no hard credit check to do this. The equal payments will be automatically withdrawn from your confirmed payment method of choice: a bank account, debit card or credit card. You can also pay off the balance early if you choose.

[Read: Best Checking Accounts.]

Is it Safe to Use PayPal?

PayPal uses encryption so that when you send a payment, your actual financial account numbers are hidden. Therefore, paying through PayPal adds a layer of protection when paying from your bank account or credit cards online.

PayPal also offers purchase protection on items you buy through your PayPal account. This allows you to submit a claim and get reimbursed if you don’t receive your order, or if you receive the wrong item.

PayPal Alternatives

Many consumers have a preferred digital payment platform, though it’s not unusual to use more than one. Whether or not you use PayPal already, here are some other options to consider adding to your digital wallet.

Apple Cash

Apple Cash is a digital payment option for iPhone users to send and receive money from other Apple devotees, or to make purchases wherever Apple Pay is accepted.

How it’s different from PayPal: While PayPal can be used by anyone, Apple Cash is strictly for iPhone users. One of the unique features of Apple Cash is that you can send or receive payments through text messaging. You can also set up a shared family account with spending controls.

Venmo

Venmo is the social media payment app that lets you send or receive money to other Venmo users. It is actually owned by PayPal, and is popular with a younger demographic that enjoys seeing the social feed of transactions and commentary from their Venmo friends.

How it’s different from PayPal: Like PayPal, Venmo lets you keep a balance within its app, or you can link a payment source including a bank account or credit card. Transactions are generally free, but if you pay with a credit card as your back-up, there is a fee involved. Though there are some retailers that let you use Venmo to pay, PayPal is offered by far more merchants.

Zelle

Zelle is a digital payment service that allows you to send and receive money using a bank-to-bank transfer. The vast majority of banks participate. Zelle used to have a standalone app, but now you can use the service via your bank’s mobile banking. The key benefit is that there is no waiting period for bank transfers.

How it’s different from PayPal: Zelle is great for sending and receiving money quickly (and with no fee), but you can’t use it for making purchases.

More from U.S. News

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How to Send Money Internationally

Best Ways to Send Money Online Instantly

How to Use PayPal originally appeared on usnews.com