EcommerceBytes-Update, Number 8 - February 19, 2000 - ISSN 1528-6703     3 of 11

PayPal Online Payment Service - Another Way to Pay for Auction Items

Email This Story to a Friend is an online payment service that allows you to pay for online auction items with a credit card. This can obviously speed the transaction and make things more convenient. And PayPal is free. Here's how it works.

Account Set Up
Setting up a PayPal account is easy - simply visit the PayPal site and register. You must give PayPal your credit card information to be fully registered. When you join, PayPal adds $10 to your account, and PayPal will credit your account $10 for each new member you refer, up to $1,000.

Putting Money in the Account
You can fund your PayPal account with a credit card, by making a direct deposit from your bank account, or by sending PayPal a check.

PayPal charges your credit card in $5 increments. For example, right now I have $10 in my PayPal account. If I send you $12, PayPal will charge my credit card $5, will send $12 to you, and I will be left with $3 in my account. And you will have $12 added to your PayPal account. There are no fees for the sender or the recipient.

Getting Money Out
Funds may be withdrawn at any time by direct deposit to a bank account, or by requesting a check from And, of course, you may send money to someone else's PayPal account. All you need to know is their email address.

About PayPal
PayPal is a service of Confinity Inc., a privately held company started in December of 1998. Vince Sollitto, Director of Communications/PR for Confinity, says PayPal has over 140,000 total users. "Over 70,000 auction items are currently listed for sale with PayPal on eBay alone."

PayPal can be used to send money to anyone with an email address, it is not limited to purchases of online auction items. Consumers can email money via their PC or through a PDA.

PayPal is not an escrow service. If you send money to someone and they fail to send you the item, PayPal will not intervene.

Your money sits in a non-interest-bearing account, so don't leave large sums of money in there unless you are planning on sending it out soon. PayPal is not a bank, and PayPal accounts are not insured by any government agency. PayPal and Confinity are not subject to banking regulations.

What if you are buying, and the seller doesn't have a PayPal account? Well, you can tell the seller about PayPal so they can open up an account. Otherwise, you'll have to pay the old-fashioned way.

If you have used PayPal or any other online payment system, leave a message in the Chat Forum at and tell us about your experience. Note that I reviewed the BidPay online payment service in Issue #6 of AuctionBytes-Update (

Here's one user's opinion from our General Feedback Message Board. Jamie Magee writes:

"I have signed up for PayPal and I recommend it highly. A very webified friend of mine emailed me that we would both get a $10 credit to our PayPal accounts if I signed up. I did, and both he and I did. Then, as a test, I paid my brother some money that I owed him and everything went fine. The service is free (I think they earn their money by hosting the money between payment and cash out). ... BTW, they have a form to automatically add a PayPal referral logo to your ebay listings after you've posted your item..."

About the author:

Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). Follow her on Twitter at @ecommercebytes and send news tips to

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