PayPal is an online payment tool that has proven itself over the years. Created in 1998 in the United States, the secure online transaction space now occupies an undisputed position in the market. It is used all over the world, which gives it a notable authority.

But how does PayPal work? Do you need an account to use it? Is it safe for your international transactions? Find out everything you need to know about the subject in this Milesopedia guide.

First of all, you should know that there are two types of users for PayPal:

• the buyer and
• the merchant.

For his part, the buyer does not need to have a PayPal account to use the payment platform – which was not always the case.

However, it is different for the merchant, who does not have the choice to create a PayPal account if he wants to offer this transaction method to his buyers. Let’s take an example to illustrate this:

You have your own online sporting goods store. Among the payment options offered by the transactional platform is payment by PayPal.

Specific settings are required for payments made via PayPal to be automatically deposited into your company’s account. Your account information, tax numbers, etc. The PayPal account is used to consolidate this information, in addition to offering you a host of services and features for your online business. We will come back to this later.

For now, let’s remember that creating a PayPal account is essential for merchants who use the tool but optional for buyers.

Creating a PayPal account is relatively simple. You will first be asked to identify yourself as an individual or professional. Then, depending on your profile, you will be asked for some information.

PayPal account for individuals

Three pieces of information are required to create a PayPal account when you are an individual (buyer)*. Here they are:

1. A valid email address
2. A valid cell phone number
3. A valid means of payment (credit card)

Having this information saved in your account will make it easier for you to use PayPal. Mainly if you use it regularly. With this information registered and verified by the team, you can quickly pay for your orders online at merchants who offer it as a payment method.

*To pay without creating an account or logging into your account, select the “Pay without opening an account” option. It is available at the bottom of the window that opens when you choose PayPal as your payment method.

PayPal business account

Opening a PayPal account as a merchant requires more time and information. However, the process remains simple. Everyone can easily find their way around.

To begin, you will be asked for information about your business, such as your field of activity, type of products or services sold, number of years in business, range of annual revenues and more.

After that, it will be aboutpersonal information, such as your phone number, date of birth, address and postal code.

Finally, you will be asked to confirm your email address by email. In one step, you will have access to your PayPal transaction platform. Important: Some additional steps are required to implement PayPal as a payment option for your buyers. If you have experience in web integration, it should be simple. Conversely, it is advisable to call on your Web integrator or a specialist in the field to configure everything.

Creating a PayPal account is relatively simple. You will first be asked to identify yourself as an individual or professional. Then, depending on your profile, you will be asked for some information.

PayPal account for individuals

Three pieces of information are required to create a PayPal account when you are an individual (buyer)*. Here they are:

1. A valid email address
2. A valid cell phone number
3. A valid means of payment (credit card)

Having this information saved in your account will make it easier for you to use PayPal. Mainly if you use it regularly. With this information registered and verified by the team, you can quickly pay for your orders online at merchants who offer it as a payment method.

*To pay without creating an account or logging into your account, simply select the “Pay without opening an account” option. It is available at the bottom of the window that opens when you choose PayPal as your payment method.

PayPal business account

Opening a PayPal account as a merchant requires more time and information. However, the process remains simple. Everyone can easily find their way around.

To begin, you will be asked for information about your business, such as your field of activity, type of products or services sold, number of years in business, range of annual revenues and more.

After that, it will be about personal information, such as your phone number, date of birth, address and postal code.

Finally, you will be asked to confirm your email address by email. In one step, you will have access to your PayPal transaction platform. Important: Some additional steps are required to implement PayPal as a payment option for your buyers. If you have experience in web integration, it should be simple. Conversely, it is advisable to call on your Web integrator or a specialist in the field to configure everything.

The PayPal account is completely free for the buyer. However, merchants must pay a transaction fee when they receive money.

First, you should know that PayPal allows you to make transactions from anywhere in the world. So, if you are in Canada, you will use the Canadian platform; if you are in France, you will use the French platform and so on. There are, therefore, platforms specific to European economic areas (such as PayPal France) and regions around the world. Moreover, the organization of exchange rates on PayPal facilitates payments between merchants and buyers worldwide.

The platform provides you with different tools to receive money from your buyers. For example, you can create invoices on PayPal and send them to your customers for a service rendered. Or, as mentioned above, you can set up PayPal as a payment method on your platform. Moreover, you can simultaneously use all the options it offers you to charge your customers.

When you get to the point of completing your order, the merchant’s site will offer you different payment options. In general, clickable icons are available on your screen, such as Visa, MasterCard and, of course: PayPal.

By selecting PayPal, you will be offered two options:

Pay by card

The tool will ask you to enter your banking information, such as your credit card number, its security code (CVC), expiration date and the name of the card owner. A “pay now” button will be activated as soon as all your information is entered. After a few seconds, your transaction will be confirmed. This step will be followed by a payment confirmation email from PayPal.

However, if your transaction is declined, a message will be displayed on the transaction screen. This refusal is usually given when your data is incorrect or your account balance is insufficient.

Pay with PayPal balance

If you have a PayPal account and there is a balance, the money will automatically be taken from that balance. What happens if your balance is insufficient to complete the transaction? PayPal will show you the remaining balance, and you will need to proceed in the same manner as the card payment to finalize the purchase.

Like any online transaction tool, PayPal comes with advantages and disadvantages, which differ from one type of user to another. Here are the most common ones encountered by the merchant and the buyer:

Advantages and disadvantages for the merchant

• Access to a protection policy allows the merchant to cover inevitable losses. We’re talking about late delivery, damaged products during shipment and more.
• Instant receipt of payments issued via the platform.
• Competitive payment fees for many merchants.

• Many buyers prefer other payment methods, such as paying directly with their credit card company, since they feel they must have a PayPal account to make their payment.
• PayPal offers high exchange rates and commission fees to the merchant, which affects their profit margin.
• The platform exercises control over transaction activities. For example, if a business sees an exponential increase in sales, PayPal may notice a difference from regular activities and consider it a threat. The account may therefore be frozen for an indefinite period.

Advantages and disadvantages for the buyer

• PayPal’s customer service is proactive. The buyer who encounters problems or has questions gets quick assistance.
• PayPal offers protection against fraudulent payment platforms. In the case of an item never being received by the buyer, PayPal can proceed to the direct refund.
• There are other payment methods besides credit cards, including bank and prepaid cards.
• There is no purchase fee.

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• Not all sites accept PayPal, unlike direct credit cards.
• Transaction failures are more frequent with PayPal than with credit cards.
• Many buyers prefer to have more than one payment option than to have only PayPal on a transactional site.