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Pay In, Pay Out, PayPal
Member Name: assethound
Date: 26/03/01, updated on 28/03/01 (660 review reads)
Advantages: Easy, and the fees can be lower than those imposed by a UK bank for cashing dollar cheques.
Disadvantages: Easy! and you will also have to pay a fee if you are sending money to someone through PayPal if you are not a US member
Wouldn’t it be good if you could have an account that you could use to buy and sell on internet auction, or to receive your Paid To Surf or Read Email programs earnings?
PayPal is a site where you can send or receive money electronically, simply by typing in the email address of the person or company you want to send money to.
WHO CAN OPEN AN ACCOUNT?
Anyone can open an account from the following countries:
The United States - where PayPal started,
Australia, Austria, Belgium, Brazil, Canada, Denmark, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Portugal, Singapore, South Africa, South Korea, Spain, Sweden, Switzerland and the United Kingdom
If you are not from the US you are classed as an International member, and PayPal does not offer quite the same benefits as for members resident in the United States.
DO I NEED A CREDIT CARD TO HAVE A PAYPAL ACCOUNT?
Yes you do, unless you are a US resident, in which case you can sign up using a checking account, which is the same as a bank account with a cheque book in the UK.
You need to validate your account with a credit card if you are an International account holder in order to send and receive funds from PayPal.
When you enter your credit card details in order to validate your account you are authorising PayPal to take $1 from your credit card and place it in your PayPal account. You then need to check your credit card statement for the transaction, which will have a four digit number after it. This is the code you need to activate your PayPal account.
The $1 that PayPal transferred from your credit card will appear in your PayPal account.
You will also need to register a bank account with PayPal if you are from the following countries:
Kingdom, France, Canada or Germany.
BEFORE you can receive funds into you PayPal account - I presume the $1 opening transaction is not included in this requirement.
You cannot withdraw funds from PayPal onto a credit card, so you need to register your bank account with PayPal before you can withdraw money - beware though - make sure that you enter the correct details, because if a fund transfer fails because your account details are wrong, you will be charged $20 by PayPal!
WHAT ABOUT THE FREE $5 FOR OPENING AN ACCOUNT I HEARD ABOUT?
The $5 account opening bonus only applies to US residents.
If you are resident in the US you will receive a bonus of $5 into your PayPal account once you have
verified your account by adding your checking (current) account, and deposited $100 into it by electronic transfer. You must also sign up for the Money Market Reserve Fund, which is like a savings account, with an interest rate of 4-5 percent.
As you can see, it isn't quite the free money it claims to be, and if you don't live in the US you can't get the $5 anyway.
DO I HAVE TO PAY A FEE FOR SENDING OR RECEIVING MONEY?
This depends on the kind of account you open, and on whether you are classed as a US member or an international member.
You can open a Personal account, which you pay no fees for sending or receiving money. I would recommend opening a Personal account unless you want to use your PayPal account as a means of receiving secure transactions for services on your web site, such as selling software, or access to paid pages, with the Web Accept feature.
The other kinds of account are the Premier and the Business account, which both have the same fee structure.
If you are an International member:
Any money transferred within the PayPal system is free
Any money entering or leaving the PayPal system from a non-US source will attract a fee of 2.6 percent of the transaction amount plus 30c., regardless of the kind of account you hold with PayPal.
This is still cheaper for me than receiving a US dollar cheque, and then putting it through my own bank, where I am charged £4 to cash US dollar cheques up to £100 in value.
The other advantage is that I don't have to sometimes cash in low value US dollar cheques, thus attracting a relatively high percentage fee, because there is sometimes a 90 or 120 day expiry date on some cheques drawn on US banks.
CAN I EARN MONEY FOR REFERRALS IF I DON’T COME FROM THE US?
NO. Unfortunately whilst our American cousins can get $5 per referral from PayPal, International members do not.
WHAT IS THE DIFFERENCE BETWEEN A US AND AN INTERNATIONAL ACCOUNT?
The main differences are that you do not get paid for referrals at the moment, although an affiliate program is in the pipeline that may change this.
Another difference is in the level of security.
US account holders are protected by the PayPal Buyer and Seller policies, and International members are not.
WHAT ABOUT SECURITY THEN?
Each PayPal member, US or International, receives up to $100,000 of cover per loss for unauthorised transactions under the terms of the SafeWeb Remote Banking Insurance Master Policy issued by Travelers Casualty and Surety Company of America, an underwriting company for Travelers Insurance.
Obviously you are required to take the necessary steps to make sure that your PayPal account is secure - ie do not tell anyone your password.
PayPal will never ask you for your password in an email or phone call.
If you click on a li
nk on the web or in an email to PayPal, check that the browser bar shows the right address - www.paypal.com
If you are suspicious of an email with a link to PayPal, type in the address www.paypal.com into the browser window rather than clicking on the link.
CAN I USE PAYPAL TO BUY AND SELL IN AUCTIONS?
This is the best feature of PayPal for many people. If you are selling on Yahoo or Ebay auctions you can even use the Automatic Payment Request.
The Automatic Payment Request is free, and speeds up your request for payment by automatically filling in details such as the winning bid, auction title, and when you want to be paid.
To add PayPal to your auction listing is a simple process - on Ebay or Yahoo, the Automatic Logo Insertion feature puts a PayPal logo on each of your listings, and if you are selling elsewhere, the html code is automatically generated for you to cut and paste.
It should be noted for buyers that although PayPal states that International members are not protected by the PayPal Buyer and Seller policies, which are basically a set of guidelines that try to protect you against fraud in auctions.
For buyers, PayPal recommend that you only buy from verified US Premier of Business PayPal account holders.
For sellers, PayPal recommend that you ship goods to the buyers confirmed address, using a carrier company that provides proof of posting, or shipment, preferably one that offers online tracking of goods. PayPal also recommends that you only ship to US addresses.
Coming soon for International members is the Instant Purchase for Auctions, which enables buyers to pay sellers immediately after they have won an auction by clicking on the PayPal logo.
CAN I ACCESS PAYPAL ON MY MOBILE PHONE?
Yes. You can access PayPal using your WAP phone, see the PayPa
l site for details.
PayPal is a great solution for UK residents to the problem of receiving payments from US companies. Although I tend to save up cheques in order to minimise the fees payable for cashing US dollar cheques through my bank account, sometimes that is not possible due to the expiry dates set on some cheques.
I have had several cheques so far with 90 day or 120 day expiry periods, and have had to bank them knowing that the fees will take up a disproportionate amount of the cheque.
The fees associated with PayPal for sending money outside the PayPal system are low, but if you pay directly by credit card you will often attract no fees for currency conversion.
I would recommend that you use you credit card for purchases in foreign currencies, and Paypal for receiving payments.
However, one advantage of PayPal is that you are not having to enter you credit card details each time you wish to purchase something.
Overall, I have been impressed with PayPal so far, and would use it again.
I have given PayPal a four star rating because of the missing features for Internationl members, although PayPal are improving their international accounts all the time.
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