How to Use PayPal

Updated on April 10, 2024

At a Glance

  • PayPal facilitates secure online money transfers via linked bank accounts, credit cards, or debit cards.
  • Funds received can be stored in the PayPal account, used for payments, or transferred to a linked bank account.
  • Users sign up for PayPal, provide details and billing address, and link a bank account or card for transactions.
  • While a bank account is not obligatory for sign-up, it is necessary for transferring funds out, but payments can still be received and used for purchases without one.

In a world where digital payments are becoming the norm, it is very important to know how to use PayPal. Fortunately, the process of signing up to PayPal and making and receiving payments is fairly straightforward.

How Does PayPal Work and How Do You Get Your Money?

PayPal is an online financial service that allows you to send and receive money using a secure internet account. You simply add your bank account, credit card, or debit card details, and your bank account is linked to your PayPal account. 

Whenever you pay using PayPal, the money will come out of your linked account. And whenever someone sends you money on Paypal, money received sits in your PayPal account. Money in your PayPal account can be used when paying for something or transferred into your bank account. 

How to Use PayPal: Step By Step

Using PayPal is easy. Here is a step by step guide for how to use PayPal:

  • Sign up for a PayPal account – go to the PayPal website and click Sign Up.
  • Decide which type of PayPal account you need – a new page will open with an option to choose between a ‘Personal’ or ‘Business’ account. A Personal account is suited for buying online and sending/receiving money from friends. The Business account allows you to integrate PayPal into your online business offers. Select the type of account you want and then click “Continue”.
  • Add your details – you now have to fill in your name, email address, and password. When you have added your details, click “Next”.
  • Add your billing address – next, you will be asked to complete your address details. Once you have completed this, confirm that you have read and understood the user agreement. Click on “Agree and Create Account”.
  • Get started – a new window will open giving you two options. The first choice is to start shopping with retailers who accept PayPal. The second is to send money to someone. Click on “Get Started” to link your bank account to your PayPal account.
  • Add your credit or debit card – in the next window, you can add your credit or debit card. This will be the bank account from which PayPal payments will be made, and into which PayPal deposits will go.
  • Shop online – when shopping online, you can use PayPal whenever you see their logo. All you need to do is enter your email address and password to make a payment.
  • Sell online or receive payments – once a payment has been made to your PayPal account, PayPal will email you a receipt. You’ll see that you’ve been credited with the total amount minus PayPal’s transaction fee.
  • Transfer money from your PayPal account to your bank account – to transfer funds from PayPal to your bank account, click Transfer Money. If you haven’t already added your bank account details click on “More” to check which bank account is allocated for transfers or add another account.

How Do I Pay Someone Using PayPal

A big part of knowing how to use PayPal is knowing how to pay someone using PayPal.

If you have no money in your PayPal wallet, you can still pay someone using PayPal. PayPal will just draw money from your bank account to make these payments.

Some people prefer to have money in their PayPal account itself. To put money in your PayPal account, log onto your account and then click “Transfer Money.” You can then transfer money to your PayPal account through the bank account linked to your account

If you want to pay someone, it’s easy to send it via PayPal. Click the “Transfer Money” option. Enter the amount and the e-mail address of the person who’s receiving the money. Then, hit “Send.”

Make sure you use the correct email address for the receiver. The e-mail address you use should be the e-mail the other person uses for PayPal.

What Are the Disadvantages of PayPal?

PayPal can be very useful when receiving money from strangers. Using PayPal means you do not share any of your bank details with the seller – the only information they get is from PayPal. Payments are instant so there is no more waiting for goods to be dispatched once a cheque has cleared banking.

However, PayPal also has a few disadvantages. One of the disadvantages is that PayPal charges high fees for non-PayPal payments. If both parties don’t have PayPal accounts, the fees can range from 1.9% to 2.9% plus $0.30 per transaction which can get very costly.

PayPal also automatically offers PayPal Buyer Protection which means you can make a claim to get your money back if goods you’ve paid for don’t turn up or they’re not as the seller described when they arrive.

The disadvantage is that if you enter into a dispute with someone and payment was handled by PayPal they will take over the arbitration process which can take a very long time.

Does PayPal Require a Bank Account? 

You don’t need a bank account to sign up for PayPal or to receive payments. 

What if I Don’t Have a Bank Account for PayPal?

If you don’t have a bank account for PayPal, you can still create a PayPal account and receive payments. Any payments that are made into your PayPal account stay in your PayPal wallet. You can use this money to make payments from your PayPal account. However, without a bank account, you can’t transfer money out of your PayPal account.

How Can I Use PayPal Without a Card?

You can give your PayPal account details to anyone who needs to pay you money. Once there is money in your PayPal account, you can use PayPal to make purchases online whenever you see their logo. All you need to do is enter your email address and password to make a payment.

PayPal FAQ

Here are some of the most frequently asked questions around how to use PayPal:

Is There a Monthly Fee for PayPal?

It’s free to open a PayPal account.  There is also no monthly fee for holding a PayPal account.

PayPal charges a transaction fee to the seller of an item, but not the buyer. There are also fees charged for currency conversion.

How Do I Find Someone’s PayPal Account?

There are no official tools available to look up someone’s PayPal account. If you previously sent money or accepted a payment from the user in the past, you can find their PayPal account by looking at your transaction history.

To make a payment, you need to have the recipient’s email address or mobile phone number. This information has to be correct and has to be the email address or mobile phone number linked to their PayPal account.

Can You Pay Someone on PayPal Without an Account?

To pay someone through PayPal without having an account registered, your recipient needs to send you a special PayPal invoice.

Read More

Final Thoughts

It is easy to learn how to use PayPal. You just need to sign up and add all of your details, and you’re ready to go!

When shopping online, you can use PayPal whenever you see their logo. You can make payments to others using their PayPal email address. You can set up your business account so that payments go directly into your PayPal account. You can even transfer money from your PayPal account into your linked bank account.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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