Transfer money to anyone without needing a credit card or even a bank account. That is PayPal in a nutshell: since the end of the nineties a fairly progressive payment method for not only web shops, but also private individuals. We will discuss this further below.
PayPal is used in the next one country (s):
PayPal is available in 202 different countries and 25 different currencies. This includes the next one countries:
- The Netherlands
- United States
- United Kingdom
Do you want to accept cheap PayPal? Compare all Payment Service Providers (PSPs) that offer iDEAL HERE.
What is PayPal?
One of the most flexible ways to transfer money to anyone: that is PayPal. The online payment system dates back to 1998, when it was still called Confinity . At that time it already provided payment options between people and companies and that has actually remained unchanged.
Unlike most payment methods, users only need an email address for this. As a customer you can deposit money into your PayPal account via your checking account or credit card.
How PayPal works
Sending money with a PayPal account is pretty easy. Customers who want to make a payment in your webshop, only need to enter the amount and the e-mail address of the recipient - Your e-mail address, that is. They log in to their personal PayPal account. This can be done via the website, but also via the app. The customer then selects the PayPal option, if available, during checkout, after which the amount due will appear on Your account.
As a webshop, you must therefore ensure that the PayPal option is indeed available during checkout. The company itself offers various options for implementing this option in your webshop (such as the so-called PayPal APIs), but it is also possible to have the process run via a Payment Service Provider.
The benefits of PayPal
One of the biggest advantages of PayPal is its wide international reach. You can easily transfer money to other countries and receive payments from all over the world. This makes PayPal a handy alternative for, among other things, the use of credit cards.
In addition, PayPal applies purchase and sales protection: beneficial for both the buying and the selling party.
The cons of PayPal
A small disadvantage of PayPal is that the money is usually not directly in your account when you transfer it from your PayPal account to your bank account. This usually takes two days.
Accept PayPal in your webshop? These are the options!
It is quite easy to integrate PayPal into your webshop with the help of a Payment Service Provider such as Mollie or Buckaroo. These types of providers then charge costs per transaction. The heights thereof vary. Digiwallet is, provided you process at least twenty transactions per day, the cheapest and charges $ 0.05 per transfer. Cardgate's Starter package is the most expensive at $ 0.35 per transaction.
Besides these costs you also pay for the use of PayPal. Opening an account is in principle free and there are no recurring costs, but PayPal does charge a percentage per transaction.
For example, a domestic transaction is accompanied by a commission of 3.40%. This rate applies when you receive an amount up to $ 2,500.00 on an annual basis and via PayPal.
Do you process transactions with a higher total amount? Then the use of PayPal becomes comparatively cheaper. By way of illustration: anyone who turnover between $ 2,500.00 and $ 10,000.00 pays a percentage of 2.90%. Between $ 10,000.00 and $ 50,000.00 this will be 2.30%. Between $ 50,000.00 and $ 100,000.00 it is 1.90%. And do you process more than $ 100,000.00 in transactions? Then you pay 1.50%.
PayPal works with additional percentages when transactions come from other countries. These depend on the country in question. To illustrate: in the case of Canada and the United States, 2.00% is added.
In addition, PayPal works with adjusted percentages for, among other things, charity transactions. Example: you then pay a rate of 1.50% for a domestic transaction.
Do you want to know more about all rates of not only PayPal, but also other online payment methods? Then view our handy comparison overview!