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How does PayPal work exactly?

I am thinking about opening an online gift shop and was wanting to offer PayPal. I don’t think I do, but do I need a credit card machine to complete PayPal transactions??? Or do they just go directly into my checking or savings account?

First get a business license, then get your domain name. Then get a pay-pal account set up for your business. Pay Pal is free for merchants, unless you set up a pro account, but the free one works fine for beginners. You will set up the pay pal account and use a domain connected email address for your account. With a business license, you will be able to open a business checking account at Bank of America (other banks too probably) – look at their economy account. You will need a bank account regardless to set up a paypal account.

Once you are a merchant, you can have your paypal account verified as a business and they will issue you a debit card (mastercard) so you will be able to get your money out and use to pay your suppliers, expenses, etc. Your money stays in paypal unless you set up a transfer to your bank. You can also transfer money into your paypal account. This is all done from inside your paypal account once it is set up.

I have had a pay pal account for my business for 7 years and have been happy with them. If you want to take credit cards off-line they have a virtual terminal service at a reasonable rate. No matter where you go, there will be transaction fees. Pay Pal is 2.9% plus 30 cents per transaction. With the free account, there is no monthly fee or statement fee. If you get another type of merchant account, you will have to meet monthly minimums in sales, as well as pay monthly statement fees, as well as transactions fees that are relatively close to paypal’s.

The thing I like best about paypal is they watch your back, provided you follow their guidelines on shipping. The transaction is INSTANT, both in incoming and outgoing money transactions. No waiting 3 to 5 days and with instant payment notification, you will get an email the minute the payment is made right in your email. I have my outlook set up to pop-up a window and do a ta-da sound. Also, customers do NOT need to have a pay pal account to make a payment to you through pay pal and the money in paypal is covered by FDIC because PayPal is actually operating inside of a real bank. I like their real-time banking best. Did I mention that once you get a paypal debit card, you can get cash back bonuses when you use the debit card as a credit card? Also, you can set it up to earn money market rates on the money you have in your paypal account – SWEET

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