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What is PayPal and how does it work

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PayPal was founded in 1998, and presently, it exists in practically every country that supports online payment.

Since Q1 2022, PayPal has been quite frequent in financial news due to issues relating to its stock value and the recent unpromising PayPal stock forecasts. These events make it quite essential to briefly examine the platform and what it does.

The name "PayPal" is almost a literal summary of the company's nature and function. In practice, it is indeed a "pal" that assists with payments - digital payments, to be exact. PayPal was founded in 1998, and presently, it exists in practically every country that supports online payment. At the time of its establishment, the company's name was Confinity. After a series of mergers and structural changes, the company's name was changed to PayPal in 2001, and it eventually went public the following year, 2002. As a platform, PayPal enables online transfers for payments between parties. Customers can create an account on PayPal's platform that is linked to their bank cards or local bank accounts. Any user who wishes to send or receive money on the platform will be required to provide proof of funds in their account and identification. Once confirmed, users can then begin to transmit funds to and from other PayPal online accounts or through the PayPal mobile application. Many retailers and online businesses allow their customers to use PayPal as a payment method.

Benefits of using PayPal
Many payment processing platforms exist in the current digital space, such as Google Pay and Apple Pay. However, PayPal's position as one of the very best of such platforms remains undiminished. Regardless of the current plunge in the company's stock, or the bleak results of PayPal stock forecasts, it remains a fully functioning payment platform with some of the best features. Firstly, due to its history, PayPal has a solid reputation and is generally embraced by smaller stores. In addition, hundreds of websites that don't support similar payment systems often include a "Pay by PayPal" option.


Photo by Marques Thomas on Unsplash

Furthermore, a refund will be given to you if an online purchase fails to arrive at the stipulated time or if the product does not match the description provided by the seller. This feature is a function of the buyer protection process included by PayPal. Equally, the platform also provides a framework for protecting sellers; they get to keep the entire amount received if it can be proven that an item was indeed shipped to a buyer who has claimed not to receive it.

PayPal also provides its users with an extra layer of protection when making payments. The online store does not retain your sensitive information in its database without your consent. As a user, you only need to enter your PayPal login, password, mobile number, and PIN each time you purchase, rather than your CVV number or card information. When you activate the service, the platform keeps you logged in, so you don't have to enter your information every time you make a purchase, regardless of the retailer. The feature is called "OneTouch" payments, which saves your user details and attaches them to a single device and browser. Therefore, if you enable "OneTouch" on your computer, it will only function on that particular computer and with that particular browser. 

Finally, the platform also designs its mobile apps specifically for android and iPhone operating systems, each equipped with the function of biometric security.


Photo by Rami Al-zayat on Unsplash

Opening a PayPal account
Some of the advantages of PayPal expressed above already prove the platform's efficiency. Moreover, these advantages further prove that issues like valuation and pessimistic PayPal stock forecasts by analysts are caused by circumstances independent of the platform's quality. Therefore, having discussed its benefits, here are tactical steps for opening a PayPal account for first-time users:

  • Visit the website, paypal.com, and select the "sign up" option.
  • Select whether you are signing up to the platform for a business or personal account
  • Input your bank and card (debit or credit) details as required.

As mentioned earlier, PayPal is massively beneficial in conducting transactions online, whether for regular utilities such as food, transportation, electricity, or more significant industrial-scale transactions. Current PayPal stock forecasts aside, the platform remains one of the most effective payment systems in today's digital market.


Main photo by Mariia Shalabaieva on Unsplash

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