PayPal

What is PayPal

PayPal is a global online payment system that allows people to send and receive money electronically. It acts as a digital wallet, connecting a user's bank account or credit card to a secure online account. The main purpose of PayPal is to make online transactions faster and safer. Instead of entering card details on every website, users can simply log in to their PayPal account to complete a purchase. The company was founded in December 1998 as Confinity, which later merged with Elon Musk's X.com. It was acquired by eBay in 2002 and became the primary payment method for the auction site. In 2015, PayPal was spun off into an independent company. Its headquarters are in San Jose, California, USA, with major operations worldwide.

PayPal Features

PayPal offers a wide range of features for both personal and business users. These features make it a versatile tool for managing money online.

• Send and Receive Money: Users can easily send money to friends and family using just an email address or mobile number. It is also simple to request and receive payments from others.
• Online Shopping: PayPal is accepted by millions of online stores worldwide. It provides a secure checkout process without sharing financial information with the merchant.
• Buyer Protection: This feature protects buyers if an eligible item doesn't arrive or is significantly not as described. PayPal can help get a refund.
• Seller Protection: For businesses, this feature offers protection against claims, chargebacks, and reversals for eligible transactions.
• PayPal App: The mobile app allows users to manage their account, send and receive money, and pay in-store using QR codes, all from their phone.
• One Touch™: This feature allows users to stay logged in on a specific device and browser, enabling faster checkouts without entering a password every time.
• Invoicing: Business users can create and send professional invoices directly from their PayPal account. Customers can pay these invoices with a few clicks.
• Merchant Services: PayPal provides a complete payment processing solution for businesses of all sizes, including website payment buttons, subscription billing, and point-of-sale systems.

PayPal Pricing Plans

PayPal's pricing is based on transaction fees rather than monthly subscription plans. There are two main types of accounts: Personal and Business.

• Personal Account: This account is for individuals who want to shop online and send money to friends and family. It is free to open an account. Buying goods and services is usually free. Sending money to friends and family from a linked bank account is also free within the same country. Fees apply when sending money using a credit or debit card, sending money internationally, or converting currency.
• Business Account: This account is for merchants, freelancers, and companies that sell goods or services. It is also free to open. Businesses pay a fee for each payment they receive. The fee is typically a percentage of the transaction amount plus a small fixed fee, which varies by country and transaction type. There are no monthly fees for a standard business account, but advanced services may have associated costs.

PayPal Free Plan

PayPal offers a free-to-use service for many common activities. A Personal account is completely free to set up and maintain. There are no monthly charges. Users can shop online and send money domestically to friends and family from a linked bank account without any fees. However, some actions do have costs. Fees are charged for receiving payments for goods and services (for business accounts), for currency conversions on international transactions, and when you use a credit or debit card to send personal payments.

How to use PayPal

Getting started with PayPal is a simple process. Here is a typical workflow:

1. Create an Account: Go to the PayPal website and click 'Sign Up'. Choose between a 'Personal' or 'Business' account and fill in your personal details.
2. Link a Payment Method: To send money, you need to link a bank account, debit card, or credit card to your PayPal account. Follow the on-screen instructions to add your financial information.
3. Verify Your Account: PayPal will ask you to verify your bank account or card. This is a security step and usually involves confirming a small deposit or a code.
4. Send Money: To send money, log in, go to 'Send & Request', enter the recipient's email address or phone number, input the amount, and choose whether it's for 'Friends and Family' or 'Goods and Services'.
5. Shop Online: At an online checkout, select the PayPal button as your payment method. A window will pop up asking you to log in to your PayPal account to confirm the payment.
6. Receive Money: To get paid, simply give the sender your PayPal email address or the mobile number linked to your account. The money will appear in your PayPal balance.

Pros and Cons of PayPal

PayPal is a popular tool, but it has both advantages and disadvantages.

Pros:

• Widely Accepted: It is one of the most recognized and accepted online payment methods globally.
• Strong Security: Buyer and Seller Protection policies offer a good level of security against fraud.
• Ease of Use: The platform is very user-friendly for sending money, shopping, and invoicing.
• Fast Transactions: Payments are usually processed instantly, making it quicker than traditional bank transfers.
• International Payments: It simplifies sending and receiving money across borders.

Cons:

• High Fees: Transaction fees for businesses and currency conversion rates can be higher than some competitors.
• Account Freezes: PayPal is known for sometimes freezing or limiting accounts with little warning, which can disrupt cash flow for businesses.
• Customer Support: Resolving issues with customer support can sometimes be a slow and frustrating process.
• Chargeback Issues: Sellers sometimes find it difficult to dispute chargebacks from buyers.

PayPal integrations

PayPal integrates with thousands of applications, especially in e-commerce, accounting, and marketing. This makes it easy to add as a payment option to existing business systems.

• Shopify integration: Add PayPal as a primary payment provider directly from the Shopify payments settings.
• WooCommerce integration: Use the official PayPal Payments plugin for WordPress to connect your store and accept payments.
• BigCommerce integration: PayPal is a pre-integrated payment gateway available in the BigCommerce control panel.
• QuickBooks integration: Connect your PayPal business account to QuickBooks Online to automatically import sales and fees, simplifying reconciliation.
• Xero integration: Set up a direct bank feed from PayPal to Xero to automatically sync your transaction data daily.
• Salesforce integration: Use AppExchange apps to integrate PayPal payment processing into your Salesforce CRM for billing and invoicing.

PayPal Alternatives

There are several other payment platforms that offer similar services.

• Stripe: A strong alternative for online businesses, especially those needing more developer tools and customization. Stripe's API is very powerful for building custom payment flows.
• Square: An excellent choice for businesses with both online and physical stores. Square offers robust point-of-sale (POS) hardware and software that integrates with its online payment processing.
• Wise: Formerly TransferWise, this service is a great alternative for international money transfers. It is known for its transparent, low fees and real exchange rates.
• Google Pay: A digital wallet for Android users that allows for fast online and in-store payments. It integrates deeply with the Google ecosystem.
• Apple Pay: A secure payment method for Apple device users. It is very convenient for in-app, online, and contactless in-store payments.

PayPal API

Yes, PayPal provides a comprehensive set of APIs for developers to integrate PayPal payment processing into their websites and applications. The APIs support a wide range of functions, including accepting payments, managing subscriptions, issuing refunds, and sending payouts.

To get started, developers need to create a free PayPal Developer account. From the developer dashboard, you can create a new application to obtain your REST API credentials (Client ID and Secret) for both sandbox (testing) and live (production) environments. The developer portal offers extensive documentation, SDKs for popular languages (like Python, Java, Node.js, PHP), and a sandbox for testing integrations.

Here is a simple cURL example to get an OAuth 2.0 access token:

curl -v -X POST https://api-m.sandbox.paypal.com/v1/oauth2/token \
 -H "Accept: application/json" \
 -H "Accept-Language: en_US" \
 -u "YOUR_CLIENT_ID:YOUR_SECRET" \
 -d "grant_type=client_credentials"

PayPal Affiliate program

PayPal has an affiliate program, which is typically managed through a third-party affiliate network like Commission Junction (CJ Affiliate). The program is designed to reward partners for referring new, active business accounts to PayPal.

To join, you must apply to the PayPal program through the affiliate network's website. Once your application is approved, you will get access to unique tracking links and marketing materials. You can place these links on your website, blog, or social media channels. You earn a commission, often a fixed bounty, for each new merchant you refer who signs up for a PayPal Business account and meets certain activity requirements, such as processing a minimum transaction volume within their first few months. Payouts are handled by the affiliate network according to their payment schedule.