Using PayPal: Receiving Funds

If you want to use PayPal to receive money, you have a range of options available. If you give someone the e-mail address associated with your PayPal account, that person can send you money from their own PayPal account. If you're selling items on eBay, you can select PayPal as an option for accepting payment through eBay. If you're selling from your own store or Web site, there are a number of options available for completing sales transactions with PayPal, including the following:

  • Adding a PayPal "buy now" button for each item you want to sell
  • Integrating a PayPal shopping cart with your Web site using the PayPal application programming interface (API)
  • Accepting payments offline or off-site to process later using PayPal's Virtual Terminal

When you're signed in to PayPal, click the "merchant services" tab to see all the options available to you as a seller. Cost and availability of these services depend on which Web site payments type you've selected for your account. You'll have the "standard" type by default as a recipient, but you can upgrade to the "pro" type for a $30 monthly subscription fee. Merchants with a moderate to high volume of transactions each month should choose the pro type to avoid some of the fees commonly charged by other payment processing services, such as gateway and downgrade fees.

From the merchant services page, you can select the wizard tools to set up new "buy now" or "add to cart" buttons for your site. This generates code you can simply copy and paste into the HTML for your Web pages. When a buyer clicks one of these buttons, your site links to a shopping cart at PayPal's site to complete the transaction. This takes the burden off you, as a seller, of managing how that online shopping cart and checkout should look and function.

For more extensive integration, including hosting a PayPal-powered shopping cart from your own site, you'll need to use the PayPal API. If you're not savvy with computer programming or Web site development, this is a task you'll want to delegate to someone who is. See X.com for the technical details about the PayPal API and developing your site to integrate PayPal features.

Once you're set up to receive money, the burden is on you as the recipient to cover the transaction costs. PayPal charges its business and premier account holders a per-transaction cost of 30 cents, plus 2.9 percent of the transaction amount. If the merchant has a higher sales volume within a month, that percentage could drop to as low as 1.9 percent. PayPal also charges fees for exchanging between its 25 accepted currencies in international transactions. All these fees help cover PayPal's customer support and other services reserved for business and premier customers.

The last option shown above is accepting offline and off-site payments. This means you've taken the buyer's name and credit card information outside of PayPal. You can enter that information and process the transaction using PayPal's virtual terminal service. This tool is available from the merchant services page at PayPal.com. Unlike other fee-based services at PayPal, virtual terminal requires a subscription of $30 per month, or the equivalent of upgrading to a Web site payments pro account. The per-transaction costs mentioned above still apply in addition to this fee.

As a recipient, you can remove money from your PayPal account by making a withdrawal. These are your options for making the withdrawal:

  • Transfer money to a bank account associated with your PayPal account
  • Request that PayPal mail you a paper check for a certain amount
  • Make purchases using a PayPal debit card

So far, we've covered how to send and receive money with PayPal and how PayPal accounts work. On the next page, we'll take a closer look at the challenges PayPal has faced and the continued controversy over its business practices.