What is Paypal and How is it Used ? Step-by-Step Guide

What is Paypal and How is it Used
What is Paypal and How is it Used

If you’re even remotely familiar with the digital world, you’ve probably heard of PayPal. It is a Digital Payment Solution that is well-known for online payments both in the country and abroad. You can use it to send and receive money online from anywhere in the world. You can also accept payments for your business online. However, you must have a PayPal account to do so. You may be wondering what this PayPal account is. And how do you open a PayPal account?

So let’s take it slowly.PayPal is an American company that started in 1998 under the name Confinity . Initially it was a software developer company, which made security softwares for handheld devices. But changed his business model in 1999. And got into the business of online money transfer.Although online payment was not in trend at that time. But PayPal probably saw the future. That is why in 1999 the first version of Paypal Electronic Payment System was launched. And today it is the world’s largest online payment company.

What is Paypal?

PayPal is a world-class digital payment system that facilitates world-wide online payments . That is, it gives the facility to send and order money around the world. With its help, you can send money online to any country in the world. And can order. Also if you do any online work or sell any digital product (such as online courses etc.) So through Paypal , you can receive online payment from your foreign customers.

For this you do not need to share anything like your name, address, mobile number, credit card , debit card and bank details . That is, with the help of PayPal, you can receive payment without sharing any personal details. All you have to do is provide your Email ID. In simple words, Paypal is a simple and easy-to-use platform! Which gives the facility of online payment all over the world.

How does Paypal work?

When you create your account on PayPal, you are asked for an email ID. And the email ID with which you register is called your Registered Email ID. This email ID is your Payment ID and this is your Paypal Account Number . That is, this email id is used to send and receive money. But how? Come on, let’s know.

Send Payments

When you make an online payment or send money to someone, you need an email ID. That is, the registered email id of the recipient is required. For example, if you send money to your friend, then you will need his email id. And the amount you send to him will be deducted from your bank account. If you will pay by card, then you will have to pay Transaction Fees separately.

Receive Payments

When someone sends you money, you get a mail. Contains full details of the amount sent. You can transfer this amount to your bank account. And if you want, you can also keep it in Paypal Account. But this facility is not available in Paypal India . That’s why whenever a payment is received, PayPal automatically transfers it to your bank account.

That is, PayPal deducts its fees and deposits the remaining amount in your bank account. If the sender of money is a foreigner. And he paid in another currency! So you have to pay fixed and transaction fees as well as currency conversion fees. Well, we will talk about Fees and Charges later. First let us know what is a PayPal account?

What is Paypal Account?
A PayPal account is a digital account that allows you to store and manage funds electronically . That is, it is a digital wallet, which gives the facility to keep, send and receive money. Also with its help you can do online shopping in any country of the world. And you can make payment sitting at home.

If you are a Seller or Merchant! So using PayPal’s payment gateway, you can receive online payment from your customers. And you can send them by making Bills. I would like to tell you that PayPal is a secure platform. Where you get the option of secure payment and withdrawal. Also, full protection is available against Online Fraud and Card Fraud. Not only this, if any seller cheats you, then you can complain against him. PayPal will freeze his account.

Well, Email ID is necessary for Paypal account. Because all the transactions happen through this. Apart from this, a credit or debit card is necessary to send payment and a bank account is necessary to receive it. If you are going to create a PayPal account, then you must have these three things. Well, there are also different types of PayPal accounts. Come, let’s know about them.

Types of Paypal Account

There are 2 types of PayPal accounts. One Individual Account and the other Business Account. These are also known as Personal Account and Merchant Account . But the question is what is the difference between these two? So let’s know

Individual Account

It is also known as Personal Account . This is actually a Basic Account, which provides the facility of Worldwide Online Payment . This is especially for those people who shop online. With its help, you can make online payment in any country. If you talk about security, then you get 24/7 online fraud and card fraud protection facility.

Business Account

This is a Fully Featured Account, which gives the facility to receive online payment worldwide. It is also known as Merchant Account and Seller Account . With its help, you can sell goods online and receive payments in any country of the world. Also, you can create Detailed Invoices for your customers. and track them.This is for those people who sell goods online or provide any service. Such as Businessmen, Freelancers, Influencers etc. If we talk about security, then features like Online Fraud Protection , Card Fraud Protection and Seller Protection are available in the business account. Also , the option of secure withdrawal is available.

How to create Paypal Account?

Before creating a PayPal account, decide which account you want to create? If you want to make online payment then Individual is best for you. But if you want to sell something online. And if you want to receive payments world wide, then select the business account. However, you have to pay fees in this. But we will talk about that later. For now let’s talk about PayPal account! That is, how to create a PayPal account?

So as I mentioned there are two types of PayPal accounts. And the process of both is different. That is why we will talk about both one by one. But first we will learn to create an individual account. So let’s get started

PayPal Individual Account

Creating an individual account is quite easy. Its process is not very long. Let us understand step-by-step how to create PayPal Individual Account:-

Step-1. SignUp For Individual Account

First of all open your web browser . And visit PayPal’s official website , Paypal.com . After that click on the button of Sign Up for free as shown in the screenshot below.

SignUp-For-Paypal-Account
SignUp For Paypal Account

Step-2. Choose Account Type

As soon as you click on the Sign Up For Free button, a new page will open. Where you will be asked to choose Account Type. Here you have to choose Individual Account . And click on Next button. As shown in the above screenshot.

Step-3. Verify Mobile Number

On the next page you will be asked for mobile number. Here you have to enter your mobile number. And click on Next. As soon as you click on Next, an OTP will come on your mobile number. Also a new page will open where you will be asked for OTP. You have to enter the OTP after seeing it in the message.

Step-4. Email & Password

After entering the OTP, a new page will open. Where you will be asked to enter Email ID and Password . Whatever email ID you enter here, it will be used as your account number. That is, this email id will be used to send and receive payment. That’s why enter the Genuine Email ID. and verify it.

As for the password, a new password has to be entered in the password field. That is, a new and strong password has to be created with the help of small and big letters, numbers and special characters of English and enter it in the specified place. After entering the email id and password, click on Next. And a captcha has to be filled.

Step-5. Fill Your Address

After filling the captcha, a new page will open where you will be asked to enter your name and address. You have to accept the Terms & Conditions by entering your name, address, pin code etc. And click on the button of Agree & Create Account . Hi, your account is ready. But you can’t make the payment right now. For this you have to follow the next step.

Step-6. Link Card

As soon as you click on the button of Agree & Create Account, a new page will open. Where you will be asked for card details. Here you have to fill the details of your Credit Card or Debit Card . That is, to enter the Card Number, Expiry Date and Security Code (CVV). And click on the link card button.I would like to tell you that it is necessary to link the card for payment. Because without this you cannot make the payment. That’s why add your credit card or debit card. So that you can pay every seller comfortably. After linking the card, click on the Next button.

Step-7. Add Bank Account

Now you will be asked to add bank account. Here you will get two options. First, IFSC Code and second, Bank Name/Location . You can choose any of these options. If you select IFSC Code option then you will have to enter IFSC Code and Account Number.You can search the IFSC Code on Google. For this, by typing the name of your bank and branch, write the IFSC Code at the end and search. For example, if your account is with SBI Station Road, Alwar branch, then you have to search by typing SBI Station Road Alwar IFSC Code.

Step-8. Verify Your Bank Account

Now a new page will open, where you will be asked to verify your bank account. Here you have to click on the OK button. As shown in the above screenshot. Now within 3-5 days Paypal will deposit two small amounts in your bank account. Such as Rs 1.04 and Rs 1.17. You have to note both the amounts by logging into your bank account. And go to your PayPal account and enter both the amounts.

If you do not have Internet Banking facility. So you can withdraw your transaction history by going to ATM . And you can find out how much amount PayPal has deposited in your account. Well, after entering the amount, you have to click on the submit button. And take it! Your account is all set. Now you can make payment.

PayPal Business Account

Now the question is how to create a PayPal business account? So its process is a bit long. Because in this the details of Business, Sales, Income, Tax etc. have to be given. That’s why the process is a bit lengthy. But there’s nothing to worry about. Because we will explain to you step-by-step how to create a PayPal business account? So let’s get started

Step-1. Visit to Paypal.com

First of all, open any web browser on your phone or PC. And type Paypal.com in the address bar and press OK or Enter. The PayPal website will open in front of you. Here you will see the button of Sign Up for free, click on it. As in the first step of the individual account.

Step-2. Choose Business Account

Now a new page will open in front of you, where you will be asked to choose Account Type. Individual Account and Business Account option will be available. You have to select the second option (Business Account). And click on Next button.

Step-3. Choose Payment Mode

Now you will be asked for 2 information. First, the means of accepting payment , and second, the Annual Sales Volume . In the first option, you have to tell how you will accept the payment. For this you will get three options :-

On website selling goods or services
Via email, invoicing or link
On marketplaces or Freelancer platforms
You have to select any one of these options. For example, if you accept payment through your e-commerce website. So you have to select the first option.

Paypal-Payment-Mode

Similarly, in the second option, the Annual Sales Volume is to be told. That is, how many sales are made in a year? For this you will get 5 options. Out of which one option has to be selected. Such as 250K to 500K USD. After selecting Annual Sales Volume, you have to click on Next button. As shown in the above screenshot.

Step-4. SignUp For Business Account

Now you will be asked for email id. Keep in mind, this email ID will also be your payment ID . That’s why enter the Genuine Email ID. And click on submit button. On clicking submit, a new page will appear where you will be asked to enter the password. Here you have to enter and create a new password. And click on submit button. As done in the fourth step of the individual account above.

Step-5. Describe Your Business

Now you have to tell about your business . That is, to tell about your company or business. You will get many options for this. As the first option is Business Type . In this you will get 4 different options, out of which to choose one option. For example Individual.

The second option is Product or service keyword . There are also different options in which to select one of the options. Which properly describes your product or service.After that the third option is Purpose Code . That is, the purpose of the business. In this you will see many options, from which to choose one. The option that properly defines your business objective. such as Media.

After that, in the fourth option, the PAN number of the company has to be entered. If you have selected Partnership or Corporate in Business Type! So in the next option, you will also have to tell the date of commencement of the company and the region. As shown in the above screenshot.Well, after that enter the CC Statement Name in the next option. That is, the name of the company that is written in the Credit Card Statements has to be entered. And finally enter the URL of the business website (if any) and click on the submit button.

Step-6. Fill Contact Information

Now you will be asked Contact Details of Business Owner . In this, you have to select the primary currency by filling the business owner’s full name, address, mobile number, etc. And click on the Agree & Continue button.

Step-7. What do you sell?

Now you will be asked about Sell & Services . For this you will get four options. Goods, Service, Other and You’re not selling yet. You can choose one or more of these options. For example, if you sell both Goods and Service, then you can choose the first and second option. On the other hand, if you do not sell anything, then select the fourth option and click on the Next button.

Step-8. How would you sell?

On the next page you will be asked how would you like to sell ? That is, how will you get payment from customers? For this you will get three options, out of which one has to choose :-
Take payments on your website or in your app
Send invoices or estimates
Create a link you can use to request payment.
If you accept payment through website or mobile app , then select the first option. On the other hand, if you send a bill of expenses to the customer, then the second, and if you send a payment request through the link, then select the third option. And click on Next button.

Step-9. Choose Purchase Type

Now you will be asked that how do customers buy your products ? There will be two options for this. Buy in a single transaction and Subscribe on a recurring basis. If you sell any products etc., then select the first option. Otherwise choose another option for subscription basis service. And click on Next button.

Step-10. Choose Setup Experience

Now you will be asked what kind of setup experience will be best for you? That is, what kind of setup is needed for checkout ? So for this you will get these two options :-You have to choose one of these. If you do not know coding . And you have not hired any developer , then select the first option. On the other hand, if you have hired a developer and he wants to build a custom setup, then choose other options. After selecting the appropriate option click on the Next button.

Step-11. Start Setup

Now you have to setup your Checkout Page . You don’t need to do much for this. Just have to answer a few simple questions. Paypal will do the rest of the work itself. That is, PayPal will generate a code for you. Which you can copy and paste in your website or mobile app.

After that you have to set up your account. That is , to answer some important questions related to Alerts , Payments and Tax . For this you will find instructions and recommendations in the dashboard. You have to answer all one by one and complete the setup.

Step-12. Ad Bank Account

In the end, you have to add the bank account of your business or company . For this you have to click on Add Bank . And add your bank account as mentioned in step number-7 of the individual account. Also you have to link your Credit Card or Debit Card. Once the card and bank account are linked , your account will be completely ready.

Paypal Fees

PayPal gives you the facility of Worldwide Online Money Transfer . Also converts the currencies of other countries into the currency of your country and deposits it in your bank account. That is why it charges some fee instead, which varies from region to region. PayPal charges you a variety of fees. For example, Fixed Fees, Commercial Transaction Fees, Currency Conversion Fees, Withdrawal Fess, Dispute Fees etc. Come, let’s get to know a little about them.

Fixed fees are based on currency . That is, according to the currency, there are different Fixed Fees . For example, fixed fee of Rs 3.00 is charged on Indian Rupee (INR). While there is a 0.30 AUD (approximately Rs 17) fixed fee on the Australian Dollar. Similarly, there is a separate fixed fee for each currency.

If you receive payment from any other country outside India! So you have to pay Per Transaction 4.40% commercial transaction fee. Also, the fixed fee is charged separately according to the currency.

Dispute Fees

Many times the customer returns the purchased product. And to get back his money, he files the Dispute Claim . Especially when he doesn’t like your product. In such a situation, you have to return the customer’s money. And takes its Paypal Dispute Fees. It varies according to different currency. For example, Rs 580 Dispute Fees is applicable on Indian Rupee.

Currency Conversion Fees

Customers make payment in their respective currency. But PayPal gives you all the money by converting it into your currency. That’s why PayPal charges you 3% more fees than the standard currency conversion rate . That is, when you receive payment in any other currency, you have to pay Standard Currency Conversion Fee + 3% Extra Fees. The standard currency conversion fee is 4%.Apart from this, PayPal charges you many types of fees. About which you can read in detail here: – Paypal Merchant Fee Page . By clicking on this link, you can know in detail about all types of Fees and Charges.

Summary

PayPal is an American company that started in 1998 under the name Confinity . Initially it was a software developer company, which made security softwares for handheld devices. But changed his business model in 1999. And got into the business of online money transfer. Although online payment was not in trend at that time. But PayPal probably saw the future. That is why in 1999 the first version of Paypal Electronic Payment System was launched. And today it is the world’s largest online payment company.

Posted by
Meenu Suhag

Meenu Suhag is an Indian Blogger, Writer, and Content creator from India. She has completed her Mastre Of Computer Asminester from KUK University. She loves to write on topics related to entertainment, movies, TV Shows, and the latest news and Sports.

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