Exploring PayPal: The Original and Most Powerful

Long before Zelle or Venmo existed, there was PayPal. It launched in the late 1990s and became the go-to way to pay for items on eBay. Since then, it has grown into a global financial powerhouse. While you can certainly use it to send money to your family, PayPal’s greatest strength, especially for seniors, lies in its security features for online shopping.

How Does PayPal Work?

PayPal operates similarly to Venmo. You create an account and link your bank account, debit card, or credit cards. You have a “PayPal balance” where you can hold money that has been sent to you or that you’ve added from your bank. You can use this balance, or a linked funding source, to make payments. You can access PayPal through its full-featured website on a computer or through its mobile app.

When you send money, you must choose between two important categories: “Sending to a friend or family” or “Paying for an item or service.” This choice is critical and determines whether fees are charged and, more importantly, whether your purchase is protected.

Using PayPal Safely: The Power of Buyer Protection

This is where PayPal truly stands apart. When you use PayPal to buy something online and choose the “Goods and Services” option, you are covered by PayPal Buyer Protection. This means that if the item you paid for doesn’t arrive, is significantly different from how it was described, or is damaged, you can file a dispute with PayPal. They will investigate the claim and can help you get a full refund.

This is an incredible safety net when shopping online, especially from smaller stores or unfamiliar websites. When you pay with PayPal, you don’t have to share your credit card or bank account number directly with the seller. You are only sharing it with PayPal, a trusted financial institution. This dramatically reduces the risk of your sensitive financial data being compromised in a data breach at a smaller online retailer.

When Is PayPal the Best Choice?

PayPal is the undisputed champion for online shopping. Anytime you are buying from a website, look for the PayPal logo at checkout. It’s also excellent for paying for services where you want a record and a layer of protection, such as hiring a contractor you found online. You can also use it to send money to friends and family, and it’s one of the most popular ways to send money internationally, though fees will apply for currency conversion.

Fees to Be Aware Of

Sending money within the U.S. to “Friends and Family” from your linked bank account or PayPal balance is free. However, if you use a debit or credit card for a personal payment, a fee will be charged. When you make a “Goods and Services” payment, it is free for you as the buyer, but the seller pays a small fee. This is why some informal sellers might ask you to use the “Friends and Family” option to help them avoid the fee. You should politely decline this request. By sending it as a personal payment, you lose all of your Buyer Protection. That small fee is what pays for your security.

Getting Started with PayPal

You can sign up on your computer by visiting the official PayPal website or by downloading the app to your smartphone. You will choose to create a “Personal” account and provide your name, address, phone number, and email. You will then link and verify your bank account or card. The verification process is a security measure and is a sign that the company is taking your account’s safety seriously.