PayPal Review

We’ve given you an introduction to what PayPal is, outlined some safety tips for using PayPal, and told you about how much PayPal costs to use.  Now, it’s time for our verdict: is your new best friend for paying and sending money online, or is it a wolf in sheep’s clothing?  We’ll weigh the pros and cons of PayPal, and then let you know.


  • Basic features are free — You don’t have to pay any money to sign up for a PayPal account, use PayPal as an online payment method, or transfer money to or from your PayPal balance.
  • Link your credit card, bank account, or both — PayPal allows you to link your credit card(s) and/or bank account(s) to your PayPal account.  So when you need to send money somewhere through PayPal, you get to decide where the money comes from!
  • Secure, private online transactions — When you pay for something on a website like eBay or send money somewhere using PayPal, it takes care of all of the upfront authorization.  In short, you can use PayPal to move money around without having to input your credit card or bank account details into every single website that you deal with!
  • Seamlessly send money PayPal-to-PayPal — If your friends or family members use PayPal, you can quickly send them money over PayPal.  Choose how much to send, what currency to send it in, and which account it’s coming from.  It’s just that easy!


  • Watch out for fees — PayPal has numerous fees associated with using their services.  Most of them are reserved for businesses that use PayPal to accept payments.  However, some fees also apply to sending money from your credit or debit card, or sending money outside of North America.  PayPal also charges fees for currency conversion.  Make sure you know where your money’s going and where it’s coming from so that you don’t get dinged.
  • Patience is a virtue — Since PayPal has to make sure that its transactions are secure (they’re dealing with money for many different people, after all), they often take a bit of time to process.  Sometimes, they can take as short as 3 business days, while other times they can take much longer.  Some users have also noticed that, at times, their actions on PayPal become restricted for no apparent reason other than vague security concerns.  Remember that PayPal prioritizes keeping you safe over being speedy, so if something doesn’t work out immediately, take a deep breath and try again later.

The bottom line: 9/10

PayPal is one of the largest, most well-known, and most flexible online payment and money-transfer solutions.  It supports multiple currencies, and allows you to use your credit card or bank account (or both) to send money where it needs to go.  Its biggest strength, though, is how widespread its acceptance is, meaning that you can use it as a payment method when shopping in millions of stores online or in the real world.

PayPal stumbles in two key areas, though.  It charges numerous fees on transactions, and while most only apply to businesses that accept PayPal, there are a few that you might get nicked with.  Mainly, these will be if you are trying to convert currencies, or move money outside of North America and/or through your credit card.  PayPal’s other main weakness is that its emphasis on security means that transactions take a long time, and that sometimes your options and abilities on the website will be restricted for unclear reasons.


Overall, PayPal is a safe and convenient way to move money around online.  You just need to plan ahead and be patient with it.  Now, if you’re ready to start using it, let’s learn how to create a PayPal account!

Is PayPal Free and How Paypal Makes Money?

PayPal is free to sign up for and use if you’re just buying stuff.  However, you may be charged fees if you use PayPal to send or request money, or to accept payments as a merchant.  How high these fees are depends largely on the types of transaction values that you deal with, and where in the world they take place.

How does PayPal make money?

PayPal makes the bulk of its money through charging payment processing fees.  These fees are applied when someone sends money to (or requests money from) someone else through PayPal.  They are also applied when a merchant makes a sale (either online or in a physical store) and the buyer pays through PayPal.

PayPal fees and pricing explained

PayPal money transfer fees

When you send money to someone over PayPal, or request that someone send you money through PayPal (and they accept that request), you will be charged service fees.  How high these fees are is based on how you fund the transaction, and where in the world it takes place.

Inside the U.S. and/or Canada

Funded with PayPal or bank account: FREE!

Funded with credit or debit card: 30₵ + 2.9% of transaction value

Outside the U.S. and/or Canada

Funded with PayPal or bank account: up to 2% of transaction value

Funded with credit or debit card: variable fixed fee* + 2.9%-5.99% of transaction value

*The amount of this fixed fee is based on recipient’s currency.

PayPal merchant fees

If you run a store (either the brick-and-mortar or online variety) and you register to use PayPal as an accepted payment method, you will be charged fees whenever a customer completes a payment using PayPal.  How high these fees are varies depending on the types of transaction values you handle, where in the world they take place, and what PayPal payment processing solution you select.

PayPal Payments Standard & Express Checkout / PayPal Online Invoicing

U.S. domestic transactions: 30₵ + 2.9% of transaction value

International transactions: variable fixed fee* + 3.9% of transaction value

Microtransaction discount rate: 5₵ + 5% of transaction value

*The amount of this fixed fee is based on the payment recipient’s currency.

PayPal Payments Pro

Monthly fee: $30

U.S. domestic transactions: 30₵ + 2.9% of transaction value

International transactions: variable fixed fee* + 3.9% of transaction value

Microtransaction discount rate: 5₵ + 5% of transaction value

Mass transaction volume discounts: contact PayPal customer service for rates

*The amount of this fixed fee is based on the payment recipient’s currency.

PayPal Virtual Terminal

Monthly fee: $30

U.S. domestic transactions: 30₵ + 3.1% of transaction value

International transactions: 30₵ + 4.1% of transaction value

Mass transaction volume discounts: contact PayPal customer service for rates

PayPal Here (brick-and-mortar)

U.S. domestic card-swipe or check-in transactions: 2.7% of transaction value

U.S. domestic scanning or keyed-in transactions: 15₵ + 3.5% of transaction value

International transactions: 2.7% of transaction value + 1% international fee AND/OR 2.5% currency conversion fee

PayPal nonprofit discounts

Donations under $100,000: 30₵ + 2.2% of transaction value

Donations of $100,000 or more: contact PayPal customer service for rates

Other PayPal merchant fees

Certain other fees may apply to accepting payments through PayPal, such as processing payments from American Express credit cards, issuing refunds, or verifying a buyer’s credit or debit cards.  For a full list of merchant fees that may apply to payments received through PayPal, click here.


That’s all the information that we can give you on the fees that you might rack up when using PayPal!

Is PayPal Safe and Secure?

How safe is PayPal?

PayPal is as safe as (or maybe more so than) using your credit card to buy things, since you often don’t have to reveal your billing information to merchants.  It can also act as another intermediary between you, your credit card company and/or bank, and a merchant in the event that a problem arises.

PayPal has had some problems with scams and fraud in the past.  However, most of these problems were largely the result of inadequate security protections (which have since been mostly fixed).  Most issues with PayPal nowadays are the result of dishonest merchants abusing PayPal, as opposed to inherent flaws in how PayPal works.

5 tips for how to avoid PayPal scams

Avoiding PayPal scams is largely a matter of using common sense and your intuition to identify potentially fraudulent merchants before your money ever reaches them.  In other words, many general tips that apply to shopping safely online can also be used to avoid PayPal scams.

1. Before you buy anything online, research it thoroughly.

One of the most basic ways of avoiding scams — or at least buyer’s remorse — while shopping online is to read all information available to you about a product, and read it carefully.  Read what the seller’s reputation is like.  See what other people who have bought from this merchant have said about the product that you are looking to buy, or the merchant’s other products.  Most importantly, examine the merchant’s returns and refunds policy, so you know what (you are able) to do if you have a problem with the item that you buy.

2. Pay for online items on the websites where they’re listed, and nowhere else.

When you’re shopping on a popular online marketplace where users can sell their own items, there is a rare chance that a merchant may send you an email or message asking you to go to a different website and pay them through PayPal from there.  This is a bad idea for a couple of reasons.  First of all, this is usually against the online marketplace’s rules, as it cheats them out of their seller fees.  Second, you’re potentially losing the protection of completing the transaction in a secure environment, where the online marketplace has a record of the sale and can track down and deal with a dishonest seller if something goes wrong.  And finally, the website that the seller leads you to may not even be for accepting payment, and may instead be for using malware to attack your computer and possibly steal your personal and/or financial information.  So if you get a request from a seller on an online marketplace to take your payment off the website, ignore them and find someone else to buy from.

3. Only make direct money transfers through PayPal to people whom you know and trust.

When you pay for a subscription or item on a website using PayPal (or your credit card), you’re usually pretty safe.  This is because the website that you’re buying on acts as an intermediary.  They get a copy of the transaction record, so if someone tries to scam you, the website can track them down and punish them for breaking the website’s rules (and your trust).

On the other hand, direct money transfers make it difficult for either you or the company facilitating the transfer to trace the money (and, consequently, get it back) once it’s in the recipient’s hands.  This is why they are one of the most commonly requested payment methods by scammers.  Therefore, you should only use PayPal to directly transfer money to people whom you have personally met and gotten to know.  If a business or business partner that you aren’t all that familiar with asks you to transfer money to them over PayPal, consider asking them if there is a more secure way that they will accept payment, such as with a credit card or in person with cash or a cheque.

4. Know how to spot fake emails supposedly from PayPal.

You may occasionally receive emails from PayPal when activities happen with your account, such as making a purchase with PayPal or money is transferred to your PayPal account.  However, there is a chance that you may also receive emails from scammers claiming to be PayPal.  Though an email may look authentic, there are two giveaways that will tell you that it’s not from PayPal.

First, it doesn’t address you by your full name or company title (i.e. it offers a generic greeting such as “Hello user” or “Dear PayPal customer”).  Second, it will ask you directly for money or sensitive information about your bank account, credit card, social security number, etc., or direct you to a website where you are to input this information.  Official emails from PayPal will NEVER ask you to do this.  Additional clues for fake emails claiming to be from legitimate companies can be found in our lesson on phishing scams.

If you receive a fake email claiming to be from PayPal, forward it to (without changing the subject line or turning it into an attachment).  This helps PayPal warn its customers about being caught by any similar emails.  Then, immediately delete the original email.

5. If all else fails, file a complaint with PayPal customer service.

If you think that you’ve been scammed, try getting in contact with PayPal customer service.  Our How to Contact PayPal Customer Service tutorial will show you how to do this.  You can also open a dispute (and potentially file a claim) against a seller whom you paid through PayPal, either on eBay or at another website or establishment that accepts PayPal as a payment method.  You can read more about how to do so here.  Hopefully, PayPal will work with you to recover your money or otherwise make things right.


Alright!  Now that you know how to stay safe when using PayPal, let’s take a look at some of the costs that may be associated with using it in our next tutorial.

What is PayPal and how does it work?

At Techboomers, one of the most common security questions that we get from our users is with respect to websites that require you to pay for something: “Is it safe to put my credit card details into this website?”  Often, the answer is “yes,” but some people are still a little uncomfortable with entering their credit card details into every single website that requires payment, either for a subscription to a service or an item that they want to buy from someone.  And with all of the horror stories about how permanent information on the Internet is, and how often others try to steal it (and sometimes succeed), we totally understand that.

That’s where a website like is useful.  Just enter a few of your personal and financial details into PayPal, and you can use it as a payment method on millions of websites across the Internet, including and!  And here’s the kicker: you don’t have to reveal your credit card or bank account details to any of those websites.  That’s right; authorization of your PayPal account is all that you need to seal the deal!

So what exactly is PayPal?

PayPal is a financial tool that lets you conduct transactions online without entering your financial details into every website you deal with.  Link your credit card and/or bank account to PayPal, and then add to (or withdraw from) a secure money pool, shop at retailers who accept PayPal, or send money to other users.

How does PayPal work?

1. Pay from your credit card or bank account

When you sign up for PayPal, you can link your credit card account, your bank account, or both to your PayPal account.  That way, when you pay for something using PayPal, you get to choose where the money comes from!

2.  Create a secure pool of money

You can transfer money from your bank account to your PayPal account.  That way, when you want to send money or pay for something with PayPal, you can just use the money in your PayPal account.  You don’t have to involve your credit card or bank account details at all in the transaction!

3. Draw money from your PayPal account when you need it

If you need to make a purchase that can’t be completed with PayPal, don’t sweat it!  It allows you to easily transfer money back into your bank account from your semi-anonymous pool on PayPal if liquid cash would be more useful to you in a certain situation.

4. Seamless online shopping through PayPal

Millions of websites accept PayPal as payment, and shopping with PayPal is a snap on e-commerce websites like eBay!  When you go to check out, simply select PayPal as your payment type, log into your account, and select where you want the money to come from: your bank account, your credit card, or your balance on PayPal.  No credit card details required!

5. Transfer money quickly and easily to other PayPal users

If your friends or family members use PayPal, too, then you can send them money when they need it with just a few quick clicks!  Just type in their email address or phone number, choose how much money you want to give them (and in what currency), write them a note if you want, select where the money’s going to come from — your credit card, your bank account, or your PayPal balance — and send your gift off!


That’s an introduction to what PayPal is and what it does! Throughout our PayPal course, we’ll teach you everything you need to know to make PayPal your best friend when it comes to transferring money online.  We’ll show you how to sign up for an  account, transfer money to your PayPal account, use your account for online purchases, and do all this and more as safely as possible.  Let us be your guide for using PayPal to move money online safely and quickly!