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PayPal is a widely used online payment system that allows individuals and businesses to send and receive money electronically. PayPal operates as an intermediary between buyers and sellers, allowing transactions to be made online without the need for sensitive financial information to be exchanged between parties.


PayPal is widely accepted by merchants and consumers worldwide and is available in over 200 markets. In addition to allowing customers to make purchases online, PayPal offers services such as money transfers, bill payments, and charitable donations.


The company offers several different account tiers, including personal, premier, and business accounts, each with varying features and capabilities. PayPal uses advanced security measures to protect its customers’ information and transactions, including encrypted data storage and 24/7 fraud monitoring.



Overall, PayPal is a convenient, secure, and a widely accepted payment option for online transactions globally. Below we examine the company’s products and pricing structure, as well as PayPal’s founding and history. We’ll also look at what kind of businesses PayPal’s services are best for and if there are any complaints merchants need to be aware of.

Paypal History and founder

Paypal was founded in December 1998 as Confinity, a security software provider for handheld devices. In March 2000, Confinity merged with, an online financial services company, and the merged company was renamed PayPal in 2001. The company was founded by Max Levchin, Peter Thiel, and Luke Nosek, among others, to create a secure and convenient way for people to send and receive money online.


In the early days of the internet, online shopping was still in its infancy, and most people were hesitant to enter their credit card information online. PayPal solved this problem by allowing customers to send and receive payments without exchanging sensitive financial information.


PayPal quickly gained traction, especially among eBay customers, who used the platform to securely send payments for their auction purchases. In 2002, eBay acquired PayPal for $1.5 billion, and PayPal became the preferred payment method for eBay transactions.


Over the years, PayPal has expanded its services beyond eBay and has become a widely accepted payment method for online transactions globally. In 2015, eBay spun off PayPal into a separate publicly traded company, and PayPal has continued to grow and evolve, acquiring several other companies and launching new products and services.


That same year, Xoom Corporation, a digital money transfer provider, and PayPal announced a merger in 2015. Under the terms of the agreement, PayPal acquired Xoom for $890 million in cash. The acquisition of Xoom allowed PayPal to expand its presence in the international money transfer market and provide customers with a more comprehensive set of digital payment services. Xoom’s platform allowed customers to send money to friends and family in other countries directly from their smartphones or computers, and the merger with PayPal gave Xoom’s customers access to PayPal’s extensive network of merchants and online services.


Since the merger, Xoom has operated as a subsidiary of PayPal and has continued to provide digital money transfer services under the Xoom brand. The integration of Xoom’s platform into PayPal has helped the company to expand its reach further and offer customers a more convenient and cost-effective way to send and receive money globally.


PayPal has also popularized the “PayPal Mafia,” which refers to a group of early former PayPal team members and founders who have gone on to achieve significant success in the technology and entrepreneurial world. 


This group of individuals, who were part of the early days of PayPal, have since gone on to create and lead some of the world’s most successful companies and venture capital firms. Some of the notable members of the PayPal Mafia include Elon Musk, Reid Hoffman, Max Levchin, Peter Thiel, David Sacks, Jeremy Stoppelman, and Russel Simmons. These individuals have had a profound impact on the technology industry, and their success has helped to establish PayPal as a breeding ground for entrepreneurial talent.


Elon Musk, one of the most famous alumni of the PayPal Mafia, was one of the co-founders of PayPal, initially known as He co-founded the company in 1999 and served as its CEO briefly before stepping down in 2000. However, he remained on the board of directors of PayPal until eBay acquired it in 2002.


In 2000, merged with Confinity, a provider of security software for handheld devices, and the merged company was renamed PayPal. The merger brought together Confinity’s expertise in security technology with’s focus on online payments and helped to establish PayPal as a leader in the online payments industry.


Since then, PayPal has continued to grow and expand, becoming one of the largest online payment systems in the world. The company has acquired several other companies and launched several new products and services, including digital wallets, mobile payments, peer-to-peer payments, and several iterations of buy now pay later offerings.


A new form of lending has taken off over the past few years known as Buy Now Pay Later, aka BNPL. Consumer love it helps them expand their purchasing power without having them go through extensive credit checks as traditional credit cards require. Furthermore, they don’t have to pay any fees or interest for the installments.


Retailers love it because they are selling more of their products and merchandise, all the while doing it via a service that will save them payment processing fees as this bypasses traditional payment networks such as Visa and Mastercard. New pseudo-innovators such as Klarna and Afterpay love it because they have launched a credit product bypassing existing payments rails and credit reporting agencies and banking regulators.


As a result, BNPL has proliferated wildly. In 2021, PayPal entered the fray by offering its own iteration of this credit product with the $2.7 billion acquisition of Paidy. That company offered a service enabling buyers to make installment payments using the company’s own proprietary creditworthiness methodology, which has been shown to increase conversion rates, order values, and repeat business.


Today, PayPal is one of the largest online payment systems in the world, with over 435 million active account users, including 35 million merchant account holders in more than 200 markets, facilitating payments in about 150 currencies. Those consumers can then withdraw those funds in 56 different currencies or continue to hold them in their PayPal accounts in 25 foreign currencies. The company, widely recognized as a pioneer in the online payment industry, is currently traded on the NASDAQ stock exchange and valued at over $85 billion

What Is PayPal Best At?

PayPal is best known for providing secure and convenient online payment services. Some of the things that PayPal is particularly good at include the following:PayPal is best known for providing secure and convenient online payment services. Some of the things that PayPal is particularly good at include the following:


1.      Sending and receiving payments: PayPal allows individuals and businesses to send and receive payments online, making it a popular choice for online transactions.

2.      Secure transactions: PayPal has a robust security system that helps protect customers’ financial information and ensures that transactions are secure.

3.      Widely accepted: PayPal is one of the most widely accepted online payment methods, making it a convenient option for many customers.

4.      Easy to use: PayPal has a user-friendly interface that makes it easy for people to send and receive payments, even if they are not tech-savvy.

5.      Mobile app: PayPal also has a mobile app that allows customers to manage their accounts and make payments on the go.

Overall, PayPal is best at providing a secure, convenient, and widely accepted platform for online payments.

PayPal Products and Services

PayPal offers a range of products and services to meet the needs of individuals and businesses. Here are some of the key products and services provided by PayPal:


·    Personal Payments: Personal Payments is a service that allows individuals to send and receive payments online. This service is free and easy to use, making it a popular choice for personal transactions such as splitting a restaurant bill or paying a friend back for movie tickets.


·      Business Payments – a service that allows businesses to send and receive payments online, making managing their finances and transactions easier. Companies can also use PayPal to process customers’ credit and debit card payments.


·    PayPal Invoicing – PayPal’s Online Invoicing service allows businesses to create and send invoices to their customers, making it easier to manage their billing and payment processes.


·      Payouts – Payouts is a service that allows businesses to send mass payments to multiple recipients simultaneously, making it a convenient option for paying team members, contractors, or affiliates.


·   Credit and Debit Cards – PayPal offers a range of credit and debit cards, including the PayPal Cashback Mastercard and the PayPal Extras Mastercard, that allows customers to earn rewards on their purchases and access their PayPal balance at ATMs.


·    Venmo – a mobile app that allows customers to send and receive money from friends and family and purchase from select merchants.


·   Xoom – a service that allows customers to send money, pay bills, and reload mobile phones for friends and family in other countries.


·    Braintree – PayPal-owned Braintree, since 2013, has offered an entire slew of options that allow businesses to customize their shopping cart within their existing platform. Braintree facilitates payment in over 40 countries in over 100 currencies and accommodates Venmo transactions, PayPal payments, and both credit and debit cards. Customers can also pay via digital wallets, ACH deposits, and various other payment methods local to users specific jurisdictions where Braintree is accepted.


Unlike most third-party payment processors, such as its parent company, customers are assigned their own merchant account when using Braintree.


·        PayPal Working Capital – PayPal Working Capital is a loan product for small businesses that allows them to access capital based on their PayPal sales history.


·    Hyperwallet – a solution that allows businesses to send payments to contractual workers and freelancers globally. PayPal’s Hyperwallet payouts enable businesses to swiftly and securely transfer payments to independent contractors, claimants, freelancers, and sellers worldwide. These payments can encompass various types of transactions, including commissions, rewards, claims, and rebates, and can be disbursed to payees with or without bank accounts, regardless of their location.


·    PayPal Honey – PayPal Honey is a collection of online shopping tools that is a part of PayPal’s offerings, assisting customers in finding bargains and earning rewards while shopping on participating websites. The company’s goal in offering the tool is to provide more ways for customers to save time and money using PayPal.


·       With the acquisition of Paidy, having developed its expertise in BNPL, PayPal launched an offering for its entire customer base known as Pay in 4. As the name suggests, customers can split payments into four installments, so long as they have an excellent-standing PayPal account, and shop with select retailers.

·       PayPal Pay Monthly – PayPal introduced a further iteration to its buy now, pay later product called “PayPal Pay Monthly.” The program allows customers to split the total cost of purchases between $199 and $10,000 into monthly payments over a period of six to 24 months, with the first payment due one month after the purchase is made. Unlike the Pay in 4 program, which only covers purchases between $30 and $1,500, “Pay Monthly” offers customers more flexibility in paying for larger purchases.


PayPal offers several lending products and services to individuals and businesses. These include:


·     PayPal Working Capital – PayPal Working Capital is a loan product for small businesses that allows them to access capital based on their PayPal sales history. This service provides quick and easy access to funds, allowing companies to grow and expand.


·      PayPal Credit – PayPal Credit is a line of credit that allows customers to make purchases, get cash advances, and take advantage of special financing offers from select merchants.


·        Bill Me Later – Bill Me Later was a lending product offered by PayPal that allowed customers to defer payment on purchases and pay for them later, with interest and fees. This service has since been integrated into PayPal Credit.


PayPal’s lending products are designed to provide merchants with quick and easy access to funds, whether they want to finance a purchase or grow their business. These services are subject to credit approval and terms and conditions, and additional fees may apply.


PayPal’s solutions also include several mobile applications, such as:


·  PayPal App – The PayPal app allows customers to manage their accounts, send and receive payments, and view their transaction history.


·        Venmo – Venmo is a mobile app that allows customers to send and receive money from friends and family and make purchases from select merchants.


·     Xoom – Xoom is a mobile app that allows customers to send money, pay bills, and reload mobile phones for friends and family in other countries.


·     Braintree – Braintree is a mobile app that provides businesses with tools for processing payments and managing their finances.



These apps are available for iOS and Android devices and are designed to provide customers with a seamless and convenient experience for managing their finances and making payments.

PayPal Point of Sale Solutions

Yes, PayPal does have point of sale (POS) solutions for businesses. The company offers a range of POS systems, including standalone devices and mobile POS solutions, allowing businesses to accept customer payments using various payment methods, including credit and debit card payments, among others.  PayPal, and contactless payments like Apple Pay.


With PayPal’s POS systems, businesses can efficiently process transactions, manage inventory, and track sales from one central location. Additionally, the company offers a suite of business tools, such as invoicing and accounting software, to help streamline various aspects of a business’s operations.

The PayPal point of sale (POS) solutions available for businesses include:


·     PayPal Terminal – This is a standalone, countertop device that can process payments in a brick-and-mortar store. The PayPal Terminal accepts a wide range of payment methods, including credit and debit cards, PayPal, and contactless payments.


·     PayPal POS – This software solution can be used with a compatible card reader or web browser. PayPal POS allows businesses to manage sales, inventory, and customer information from a single platform.


·    Braintree POS – This cloud-based point of sale solution is part of the PayPal family of companies. Braintree POS integrates with various payment methods and can be used on multiple devices, including iPads, smartphones, and desktop computers.



Each of these solutions has its own features and benefits, and businesses can choose the one that best fits their needs based on factors such as the type of business, the size of the company, and the payment methods they want to accept.

PayPal Pricing and Fees

PayPal offers a range of products and services to help individuals and businesses with their financial transactions. Below is a tabulation of PayPal’s products and pricing. It is important to note that PayPal operates globally and has a pricing structure for each country of operation. We are presenting the pricing details for US merchant rates and fees for this review.



Personal Account


Premier Account

Free, but with a monthly fee of $5 for monthly sales over $500.

Business Account

Free, but with a monthly fee of $30 for sales over $15,000.

Payments Standard

2.9% + $0.30 per transaction fee

Payments Pro

Monthly fee of $30 + 2.9% + $0.30 per transaction fee

Payment Processing Rates

Payment Type


Merchant Commercial Transactions

PayPal Checkout

3.49% + $0.49

PayPal Guest Checkout

3.49% + $0.49

QR code Transactions – > $10

1.90% + $0.10

QR code Transactions – <= $10

2.40% + $0.05

QR code Transactions through 3rd-party integration

2.29% + $0.09

Pay with Venmo

3.49% + $0.49

Send/ Receive Money for Goods and Services


Standard Credit and Debit Card Payments

2.99% + $0.49

All Other Commercial Transactions

3.49% + $0.49

International Merchant Commercial Transactions

Add 1.50%


PayPal Donate Button

2.89% + $0.49

PayPal Listed Fundraisers


PayPal Unlisted Fundraisers

No Fee

PayPal Checkout – Donations

2.89% + $0.49

International Donations

Add 1.50%


Charity Transactions

1.99% + $0.49

International Charity Transactions

Add 1.50%


APM (Alternative Payment Method) – AliPay, and other wallets

2.59% + $0.49

International Alternative Payment Method

Add 1.50%

PayPal Here

Card Present transactions


Keyed-in transactions

3.50% + $0.15

In-store PayPal transactions 


QR Code payments


International transactions

Add 1.50%

PayPal Online Card Payment

PayPal Advanced Credit/ Debit Payment

2.59% + $0.49

PayPal Payments Advanced

2.89% + $0.49

PayPal Payments Pro

2.89% + $0.49

Virtual Terminal

3.09% + $0.49

International transactions

Add 1.50%

PayPal Payflow Gateway

Payflow Pro Transactions


Payflow Link Transactions


PayPal Zettle

Card Present transactions

2.29% + $0.09

Keyed-in transactions

3.49% + $0.09

QR Code payments

2.29% + $0.09

PayPal Payouts

US-based transactions

2.00% – Fee capped at $1.00

US-based transactions via API


International transactions

2.00% – Fee capped at $20.00


US Micropayments

4.99% + $0.09

International Micropayments

6.49% + $0.09

PayPal Fees


Chargeback fees

 $20 per chargeback 

Dispute fees

 $15 per dispute 

Dispute fees for high-volume merchants

 $30 per dispute 

Bank withdrawals – standard


Bank withdrawals – Instant


Card withdrawal


Payflow Pro

 $25 per month 

Payflow Link Monthly fee


PayPal Recurring Billing Service

 $10 per month 

PayPal Fraud Protection – Basic Package


PayPal Fraud Protection – Advanced Package

 $10 per month 

PayPal Fraud Protection – Buyer Authentication +

 $10 per month 

PayPal Fraud Protection Excess fees – Basic Package


PayPal Fraud Protection Excess fees – Advanced Package

 $0.05 per transaction 

PayPal Fraud Protection Excess fees – Buyer Authentication +

 $0.10 per transaction 

PayPal Fraud Protection Excess fees – Recurring Billing Service


Please note that these rates and fees are subject to change and may vary based on the country you are located in. Additionally, PayPal may offer different pricing plans or discounts for businesses or high-volume transactions. It’s best to consult the PayPal website or speak with a representative to get the most up-to-date and accurate information on their products and pricing.


Details Of The Contract Offered By PayPal

PayPal offers several contract options for merchants who use its payment processing services. The type of contract available to a merchant typically depends on the products and services they use and the volume of transactions they process through PayPal. Some of the contract options available to PayPal merchants include the following:


·     PayPal Payments Standard: This essential, transaction-based pricing model charges merchants a flat fee per transaction. There is no monthly fee or setup cost for this service.


·    PayPal Payments Pro: This more comprehensive payment processing solution provides merchants with a virtual terminal, API access, and the ability to process payments directly from their website. The pricing for this service includes a monthly fee and a per-transaction fee.


·  PayPal Express Checkout: This service allows merchants to integrate PayPal into their checkout process, providing customers with a seamless checkout experience and the ability to pay with their PayPal account. The pricing for this service includes a per-transaction fee.



Merchants may also be able to negotiate customized pricing and contract terms with PayPal, depending on their specific needs and transaction volume. 

Customer Support

From experience and the reviews left by the users of Payment Depot, this merchant service provider supports its customers via:

24/7 Help & Support

Not available

Phone Support

Monday-Friday 8AM to 8PM Central Phone Support


Technical and Integration Support via Email


Full FAQ Knowledge Base
Online Step by Step Help Guides

PayPal's Challenges With Fund Holds, Lawsuits, and Customer Service

With over 100 million customers, the company has received thousands of customer complaints, with sudden account freezes and poor customer service being the most common. While holds are a common industry practice, business owners have reported difficulty explaining why funds were held for extended periods.


In 2017, PayPal settled a class-action lawsuit for over $4 million, which alleged that the company had mishandled disputed transactions and placed holds, reserves, or limitations on customer accounts without notice. In 2021, the Securities and Exchange Commission and the Consumer Financial Protection Bureau launched investigations into the company’s swipe fees and marketing practices. As a result, PayPal’s stock plummeted, and several class-action suits were filed against the company, including one by World Series of Poker champion Chris Moneymaker.



To address customer service problems, PayPal offers a basic support line, but merchants can pay for higher levels of support, such as “13X7 Enhanced” or “24X7 Premium.” Despite these options, wait times, and poor service can still occur. With these challenges, PayPal’s experiences may set standards for the industry going forward.


PayPal has come a long way since the company’s inception more than two decades ago. At the time, the internet was still in its infancy, and online payment transfers still felt scary despite embracing the novelty. Today, the company that had to pay customers $25 to sign up and trial their product is an industry leader staying abreast of all the latest trends in consumer behavior and financial technology. While the company sees transaction volumes drop, the amounts of those transactions are holding up among PayPal customers. The company’s financials have been buttressed from declines in its traditional products as PayPal astutely ventured into new areas of payments technology, such as Buy Now Pay Later.


The company sees success with BNPL. Since the product’s launch three years ago, PayPal has extended more than 200 million loans to over 30 million customers and counts more than 300,000 merchants among its BNPL partners. The company’s BNPL loans of $20 billion through 2022, up over 160% from 2021, and the BNPL transaction count grew by over 200%.


Today, PayPal is a leading financial services provider offering various products and services for individuals and businesses. Its solutions, which include personal and business payments, invoicing, payouts, credit and debit cards, Venmo, Xoom, Braintree, and PayPal Working Capital, are designed to make online transactions secure, fast, and accessible. 


In addition to its lending products, PayPal’s mobile applications, such as PayPal, Venmo, Xoom, and Braintree, enable customers to manage their finances on the go. With a mission to democratize financial services and make them more accessible, PayPal continues to innovate and develop new products and services that cater to the evolving needs of its customers, making it a reliable and convenient option for managing digital finances.