How PayPal Works

PayPal is a popular payment processing system for online users. However, how PayPal works and what exactly is the purpose of this system remains a mystery to many. You are likely to get the explanation you seek from one of its major architects, or someone who has been a PayPal user for quite some time.

PayPal has a great database of buyers and sellers, so that in case of a dispute between the two parties, they can be easily traced and assessed. The eBay seller who helps you through the whole process is an active participant, making any disputes and conflicts more productive and thus more beneficial for all concerned.

There are no small fees involved with PayPal transactions. It is free to use and the buyer pays only if something goes wrong. The seller doesn't pay anything unless the transaction was not completed or the payment is returned.

In essence, PayPal is a private agreement between the parties. The buyer and the seller use it directly to process the payment. If one of the parties fails to follow the terms of the agreement, then that party may be refused the credit card payment. PayPal itself is responsible for this refusal and must take steps to rectify the situation.

Buyers who have trouble with PayPal may have problems too, due to the fact that most PayPal sellers do not accept payments made with checks. As far as the buyer is concerned, she cannot avoid having to hand over her money by simply changing payment methods. It can only be done by the seller.

As far as the seller is concerned, there is a possibility that she will have to take a lot of precautions before starting the transaction. For one thing, she must be aware of the processes involved in PayPal and how these processes can affect her sale. This means that she should have sufficient information about the product or service, the price range and other pertinent facts, before she finally starts the entire transaction. She may also be confronted with questions on how she plans to use the money she collects.

Since the process is the same for both the parties, the seller has the best opportunity to take action quickly. For instance, when a refund is required, this process can be accomplished quite quickly, even without the seller having to do anything. Once a transaction is established, there is no need for further communication from either side.

There is nothing stopping the seller from offering a feedback rating system to the buyer. PayPal can act as a third party mediator, taking care of matters of feedback. The buyer does not have to wait for an entire transaction to be completed before he can get a feedback statement.

The seller may offer different packages or discounts, which may cause a conflict between the buyer and the seller. PayPal acts as the mediator between the two parties, handling complaints and disputes between them.

eBay sellers may find it hard to make a sale without PayPal. This is because there are plenty of potential buyers who can benefit from using PayPal.

However, eBay sellers should be careful about choosing their company's history. It is quite possible that there are a number of fraudulent accounts that have been opened under the name of a well-known company. Thus, a good comparison of companies should be conducted before entering into any deal.

A good example of how PayPal works is when a person buys a car, but finds that the vehicle has been stolen. PayPal will do its best to make sure that the rightful owner of the car gets it back as soon as possible. It may take a long time, but it will be worth it.