PayPal Review

PayPal is a giant of ecommerce and digital payments, offering easy ways to send and spend money, shop online, and manage your finances. Since being founded over 20 years ago, PayPal has accumulated over 400 million individual and business users, and changed the way we shop and spend online in a whole range of ways.

New to PayPal, or wondering if it’s really worth getting yourself an account? We’ll cover all you need to know about PayPal, including fees, whether it’s safe to use, how fast it is, how to get set up, and more.

It’s definitely a convenient way to send domestic payments and shop online, but for international transfers, it isn’t necessarily your best option. We’ll go over PayPal alternatives at the end. Let’s dive in.

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PayPal: Key points

Key features:

  • Use PayPal to send and receive domestic and international payments
  • Shop online with buyer protections in place
  • Access credit and cash back
  • Deposit your salary or other payments into your account
  • Pay bills
  • Buy and sell cryptocurrencies
  • Get linked cards for spending and withdrawal

Key stats:

  • 426 million users and merchants have PayPal accounts worldwide
  • 19 billion+ transactions a year are carried out through PayPal
  • Account holders complete an average of 45+ transactions a year
  • The PayPal group includes multiple different entities operating businesses in finance, credit, online returns, consumer discounts and more

Pros:

  • Huge global network, broadly accepted when shopping online
  • Send payments instantly to individuals and businesses with no need for their bank account details
  • Trusted provider with a large user base and good protections for account holders

Cons:

  • Fees apply for some services, which can be complicated to navigate
  • Charges and exchange rate markups can be high for international transactions in particular
  • Send money to another PayPal account only – not direct to a bank account

Overall:

PayPal has become such a dominating force in e-commerce because it offers popular services which are well-loved by its users. It’s grown to offer a really good range of products from payments and accounts to credit and crypto-trading. And because it’s so widely known and accepted you’ll find you can often use your PayPal account to send and receive money, spend online and in person and more.

PayPal’s main drawback is in its fees. While some services – especially when spending online and in USD – are free, others have relatively high charges. This is especially so whenever you’re spending in a foreign currency or sending an international payment. If you make frequent international transactions, PayPal may not be the best bet for you – but for local payments and ecommerce shopping it can be a convenient and cost effective provider.

How much does it cost to transfer with PayPal US?

PayPal offers super convenient payments to friends and family at home and abroad. Sending a payment is usually much easier than using your normal bank, and the funds can be deposited almost instantly into your recipient’s account.

However, PayPal fees may not be the cheapest around when sending money internationally, so it’s well worth comparing the fees with a few alternatives and weighing up the cost and convenience to see which suits you best.

Here’s how PayPal measures up against another specialist service – Wise – and a major US bank – Wells Fargo – on a number of different transfer values, with example payments being made from USD to the UK, to be paid out in British pounds.

Sending in USD:Your recipient gets with PayPal:Your recipient gets with Wells Fargo:Your recipient gets with Wise:
1,000 USD809.03 GBP815.47 GBP838.95 GBP
5,000 USD4,061.57 GBP

 

4,077.52 GBP4,197.40 GBP
10,000 USD8,127.19 GBP

 

8,155.05 GBP8,395.43 GBP

Fees and exchange rates correct at time of research -25th August 2022

 

Read our detailed article to learn more about how PayPal compares to Wise:

Wise vs PayPal

About PayPal US

PayPal was founded in 1998 and has grown over the years to incorporate a broad range of services through its own app and desktop site, as well as a series of sister companies within the PayPal group. Overall, PayPal has a name for convenient, secure digital transactions, letting users send payments and spend easily online and via apps.

PayPal accounts can be opened by individuals and businesses, but different features and fees apply for each account category. We’ll walk through some of PayPal’s key services for personal account holders, next.

For information about business accounts, check our PayPal Business Account Review.

Send and receive personal payments

One of PayPal’s core services is allowing account holders to send and receive instant digital payments, online or via its app. You can send a PayPal payment with just a phone number or email address, which makes it much more convenient than making a standard bank transfer. That ease of use makes PayPal payments a popular way to split bills or send money to friends and family.

Great for: Anyone sending money to friends and family – particularly good for domestic USD payments funded by a bank account or PayPal balance, which are fee free.

Spend online

PayPal was one of the first digital payment platforms to allow customers to shop easily online, without needing to hand over their entire bank or card details to merchants they don’t know. With high level security measures and PayPal’s own buyer protections, PayPal became a very popular way to shop online – leading to it being widely accepted by merchants around the globe.

Spending online with PayPal is as easy as logging into your PayPal account from the checkout of the site you’re browsing. And like with sending payments, domestic USD transactions are usually free.

Great for: Anyone shopping online – PayPal is widely accepted by merchants, and free to use when no currency conversion is involved.

PayPal credit

PayPal has a pretty impressive range of credit types and options. You can apply for 6 month consumer credit on eligible purchases over 99 USD, look for Buy now, Pay later options, or get a PayPal credit card for example. PayPal also offers debit card options which link to its money management accounts, and cash back and rewards on spending.

Great for: Anyone spending online or in person and looking to spread the cost of their purchases with a consumer loan.

Manage your money

With the PayPal app you can set up a PayPal balance account, see your balance on the go, buy and sell crypto, save, receive direct debits, add funds with cash or checks, and spend in person or online with linked PayPal cards. While you don’t get all the functionality of a full bank account, you can do a lot with your money, with the convenience of an app to give you fast access and a full overview, whether you’re at home or on the move.

Great for: Anyone looking to manage their finances from their phone with a convenient, app-based account.

How does PayPal US work?

Setting up a PayPal account is pretty easy and can be done online or by downloading the PayPal app. It’s useful to note that PayPal account features and fees can vary depending on where you are located.

This guide is about PayPal US, but if you’re a US citizen based elsewhere you may find that the account you’re offered is not exactly the same as it’ll be matched to your residence rather than your nationality.

Once you have your PayPal account you can easily log in to manage your money, make or request payments, and spend money online. If you’re sending money to someone, it’ll be deposited into their PayPal account, so you’ll need to double check they have an active PayPal account they can access before you process the transfer. If the recipient then wants to move the funds to their normal bank account they’ll be able to, although this may take a few days or incur an extra fee. For more,  check out how PayPal works.

Is PayPal US safe?

Yes. PayPal is safe to use. In the US, PayPal is licensed and regulated on a state by state basis. It’s a global company, which means PayPal also has to comply with financial rules and regulations set by global bodies all over the world. That means you’re well protected even if you’re buying something internationally, or sending a payment in a foreign currency.

PayPal US pricing

PayPal operates accounts with different features, fees, terms and conditions, depending on where in the world you’re located. Because there are so many different services offered, there are lots of different potential fees you might run into when using PayPal, so checking through the terms for your specific account is crucial.

Most PayPal transactions are made from your basic account (used for sending and receiving payments, shopping online and so on), or a PayPal balance account – this is the holding account you can use to receive direct debit payments, pay bills and manage your money more comprehensively. We’ll look at some of the costs linked to both basic and account transactions in a moment.

PayPal exchange rate

If you have a PayPal account based in the US, your account will use USD as the base currency. That means that any time you need to transact in a different currency, you’ll need to pay some form of international transaction fee, and/or a currency conversion charge. PayPal currency conversion fees vary depending on the transaction type:

Transaction typePayPal currency conversion fee
  • Paying for goods or services in a currency other than the currency the goods or services are listed in
  • Sending money to a friend or family member in any currency other than USD
  • Sending money using PayPal Payouts in any currency other than USD

 

Usually 4%
  • All other transactions
Usually 3%

PayPal transaction fees

Let’s work through some of the common transactions you may make with a basic PayPal US account, and what you’ll need to pay.

Transaction typePayPal US fee
Shopping onlineNo fee as long as no currency conversion is required
Sending and receiving domestic USD paymentsFunded with a linked bank account, PayPal balance or Amex Send Account – no fee

 

Card payments – 2.9% + fixed fee

Sending international payments5% (minimum 0.99 USD – maximum 4.99 USD)
Withdraw PayPal funds to a bank accountFree for standard withdrawals

 

Instant withdrawals – 1.75%

Withdraw PayPal funds to a card1.75%
Have funds mailed to you by check1.5 USD

PayPal balance account fees

If you choose to open a PayPal balance account, which can come with a linked card, you’ll have more ways to use your PayPal account – but also more potential fees. Here are some of the important ones.

Transaction typePayPal US fee
Sending international payments5% (minimum 0.99 USD – maximum 4.99 USD)
Add funds to your account

Cash reload – up to 3.95 USD

Check reload – 1% – 5% (minimum 5 USD)

Out of network ATM withdrawalUp to 2.50 USD
International ATM withdrawal2.50 USD
Foreign transaction fee (debit card)2.5%
Withdraw PayPal funds1.75%
Have funds mailed to you by check1.5 USD

How long does a PayPal payment take?

If you’re sending a payment with PayPal it’ll be instantly deducted from your account and deposited into the recipient’s PayPal account. They’ll then be able to hold the funds in their own PayPal account, or withdraw to their linked bank account if they’d prefer.

PayPal US Pros

  • Huge global network, broadly accepted when shopping online
  • Instant payments to individuals and businesses with no need for their bank account details
  • Trusted provider with a large user base and good protections for account holders

PayPal US Cons

  • Complicated fees apply for some services
  • High international transaction costs in particular
  • Send to a PayPal account only – not direct to a bank account

How to use PayPal US

Once you have a PayPal account it’s easy to send a payment. Here’s how to set one up, assuming you have a fully verified account already:

  • Log into your account and select Send & Request
  • Enter the email address, mobile number or name of the recipient and click Next
  • Confirm whether you’re making a personal or business payment
  • Enter the amount, choose the currency and add a note
  • Click Continue
  • Select the payment method you want to use
  • Review and hit Send Payment Now to complete your transaction

Funding methods

To use your PayPal account you’ll need to link an eligible bank account or card. Alternatively, if you have a balance account you’ll be able to add money in cash, by check, or through direct deposit. You can also fund either account by having someone else send you money to your PayPal account directly.

Payout methods

PayPal payments are sent to other PayPal accounts, instantly. Once the recipient has the money they can withdraw it to their linked bank account if they want to, although this may take a day or two.

How to create an account

Here’s how to sign up for a PayPal account:

  1. Open the PayPal desktop site or app
  2. Click Sign up for a PayPal account
  3. Select the type of account – personal or business – and click Get Started
  4. Follow the prompts to enter the required information and click Continue
  5. Follow the instructions to complete your account sign-up

How do I verify my PayPal account?

Once your PayPal US account is registered, you’ll need to take a few steps to verify it. This involves confirming your email address or phone number, and linking a bank account. You can link your bank account instantly by logging into your online banking, or manually.

To link your account manually you’ll need to have PayPal send you 2 small deposits, which you can then enter into your PayPal account as verification. This shows that the PayPal account has been linked to a bank account you have access to.

How long does verification take

If you link your bank account by logging into online banking, verification is usually instant. If you’re doing it manually you’ll need to keep an eye on your bank account to see when the PayPal deposits arrive. This may take a day or two.

PayPal limits

There’s no limit to the amount of money you can send from a verified PayPal account. However, you may find there are limits per transaction of 10,000 USD to 60,000 USD depending on your specific account.

Supported currencies

PayPal lets you hold and send payments in 25 major global currencies, to PayPal accounts held all over the world.

PayPal accessibility

PayPal can be accessed through their desktop site, or apps which are available on Apple and Android phones. If you’re based in a different country you’ll be able to see all the details about PayPal’s local accounts wherever you are, online – they cover an impressive 200+ countries and regions.

PayPal customer service

PayPal has a great help center online which allows you to get answers to common questions, source ideas from the community and view guides to using PayPal.

If you have outstanding issues you can also get in touch with PayPal by logging into your account and using the chat function or calling customer service direct from your PayPal app.

PayPal alternatives

PayPal may not be the best provider for you, depending on how you transact or use your account. Here are a few alternatives to PayPal in the US which you may like to think about:

  • Western Union – domestic and international payments arranged online or in person via an agent, payouts to bank accounts or for cash collection. See how they are compared: Western Union vs PayPal.
  • Revolut – open an online international account to send and hold multiple currencies from the same account.
  • Wise – if you’re looking for a better way to send international transfers online and in app you may want to check out Wise accounts. You can open your Wise account for free, get a linked Wise debit card, and hold, send, spend and exchange 50+ currencies with the real mid-market rate and no hidden fees. Check our comparison article to see how PayPal compares to Wise:

Wise vs PayPal

Conclusion

PayPal offers a broad range of ways to send and receive payments, spend online and in person, get credit, and manage your money. All PayPal’s services are available online and in the PayPal app, making it convenient and fast to transact. And because PayPal is such a huge organization, you’ll find it’s widely accepted by merchants, and easy to send money to other PayPal account holders globally.

It’s free to carry out a lot of PayPal US transactions as long as you’re using USD. However, if you’re spending or sending a foreign currency, you’ll want to double check costs as conversion and international fees can be on the high side.

Visit our comparison page to discover different money transfer providers and find the best for your needs:

Compare cheap money transfer providers

FAQ

How much does PayPal cost?

It’s free to open a PayPal account. Domestic transactions are often free, but international and foreign currency costs – as well as transactions funded using a credit card – can have relatively high fees.

How long does PayPal take to transfer funds?

PayPal payments are deposited instantly in the recipient’s PayPal account.

Is PayPal safe?

Yes. PayPal is locally and globally licensed and regulated, to keep customers safe.

How does PayPal apply exchange rates?

PayPal uses a currency conversion fee or markup, or 3% or 4% depending on the transaction type, which is charged on top of any transaction fee that might apply.

Does PayPal have a mobile app?

Yes. Use PayPal through its mobile apps for Android or Apple phones.

How does PayPal work?

Create a PayPal account online or in the app, to send and spend money, receive international payments and access a range of consumer finance products and services.

How many currencies does it support?

PayPal supports 25 currencies to send, hold and receive.

 

By Seyma Mektepli Updated September 2nd, 2022