What is PayPal?

PayPal is an online payment and commerce service that allows individuals and businesses to transfer funds electronically to almost anywhere in the world using the internet. If you need to send money to someone, they only need to have an email address - you can still send them money using PayPal.

A PayPal account is less like a bank current account and more like a holding account, where you can place and use money from your own bank account. PayPal is free to set up and it doesn't charge for transactions. If you set up a Paypal account, it will ask you for your bank details, as well as the usual personal information. 

When Would I Use PayPal?

PayPal is most often used to send or receive payments from other websites; the service is most associated with the auction site eBay. To buy or sell on eBay, you must have a PayPal account (eBay acquired PayPal in 2002). You can also purchase or sell goods and services using PayPal, make or receive donations, or exchange cash with someone.

The popularity of PayPal grew on the back of its attraction to small businesses or individuals who were unwilling or unable to accept credit cards, and also for consumers. The service also appealed to auction buyers because they could fund PayPal accounts using bank account balances.

To learn more about using PayPal, watch this film: