If you're not already using PayPal, you probably will soon. As of 2012, It handles more than 5 million transactions a day, which accounts for about a fifth of all global e-commerce. People use it to buy things on the Internet, send money to others, or get paid for work. Most individual PayPal transfers are free. Merchants pay a fee to use the service, and some debit and credit card transactions have a small fee.
Buying Is Free
You never pay a fee when you use PayPal to buy something. An individual seller pays a PayPal fee, starting at 2.9 percent of the sales price plus 30 cents per transaction. Merchant rates start at that same figure, but the percentage declines as sales volume increases. For example, a sale between $3,000 and $10,000 has a fee of 2.5 percent plus 30 cents.
Individual sellers, such as those offering items on eBay, pay fees depending on the amount of the sale. For instance, someone selling a kayak for $500 would have to pay a fee of $14.50, so PayPal would give the seller $482.50. PayPal forbids sellers from adding the amount of the fee to the purchase price. Merchants pay sales fees on a sliding scale determined by the amount of the transaction.
You don't pay anything to send money to someone who also has a PayPal account if you transfer funds from your bank account. You will pay a fee if you use a credit or debit card account. PayPal charges a fee of 2.9 percent of the transaction plus 30 cents or $3.20 on a $100 transfer. The sender or originator of the transfer decides who pays this fee.
You can use PayPal for international transactions, but there will always be a fee with those. A country may charge anywhere from .5 to 2 percent of the value of anything sent from a bank or PayPal account. Fees to pay or transfer money using a credit or debit card range from 3.4 to 3.9 percent of the value, depending on the country.
Most PayPal users set up individual accounts. PayPal also has a premier account designed for full families, and a business account for commercial transactions. You also can set up a mobile account for smartphone transactions, or get a PayPal payment or debit card. The account statements are always available at the PayPal home page.
All PayPal transactions are automatically secured, but individual users are responsible for securing their user identifications, passwords, personal identification numbers or any other information used to verify account activity. It's also up to you to know who you're dealing with. PayPal won't have your back if you make a deal with the "wrong" party.
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