What PayPal does and what you need to start
PayPal is a digital wallet that holds money and lets you send it to other people, pay for things online, or receive payments from customers or friends. You create an account, link a bank account or card to it, and then move money in and out. The platform handles the transfer behind the scenes—your bank details stay private from the person you're paying or the person paying you.
To open a PayPal account, you need an email address, a phone number, and either a debit card, credit card, or bank account. PayPal will verify your identity by asking for your name, address, and date of birth. If you link a bank account, PayPal deposits two small amounts (usually under $1 each) and asks you to confirm the exact numbers—this proves you own the account. The whole process takes about 10 minutes.
Key Takeaways
- You can send money to anyone with an email address or phone number, and they don't need a PayPal account to receive it.
- Sending money to friends and family within the US is free if you use your bank account or PayPal balance, but credit or debit card transfers cost 2.2% plus $0.30.
- Receiving money is free for personal transfers, but if you're paid for goods or services, PayPal charges 2.2% plus $0.30 on the amount received.
- Money sent as a payment sits in the recipient's PayPal account until they transfer it to their own bank, which usually takes one to three business days.
- PayPal's Seller Protection and Buyer Protection cover transactions for goods and services, but not personal transfers between friends.
Sending money to someone else
Log into your PayPal account and click "Send Money" at the top of the page. Enter the recipient's email address or phone number. If they have a PayPal account, PayPal will recognize it. If they don't, they'll receive an email or text asking them to claim the money—they can do this without opening a full account, though they'll need to provide basic information.
Enter the amount and choose whether you're sending money as a personal transfer (to a friend or family member) or as a payment for goods or services. This choice matters for cost and protection. Personal transfers are free if you use your bank account or PayPal balance. If you use a credit or debit card, PayPal charges 2.2% of the amount plus $0.30. Payments for goods or services always cost the sender nothing, but PayPal charges the receiver 2.2% plus $0.30.
Add a note if you want—this is useful for invoices or reminders of what the payment is for. Review the details and click "Send." The money leaves your account when ready. The recipient sees it in their PayPal account right away, but if they transfer it to their bank, the actual deposit takes one to three business days depending on their bank.
Receiving money from someone else
You don't have to do anything to receive money—once someone sends it to your email address or phone number linked to PayPal, it arrives in your account. You'll get an email notification. The money sits in your PayPal balance until you move it.
To transfer money from PayPal to your bank account, log in and click "Transfer Money" or "Withdraw." Select "Transfer to Your Bank" and choose the bank account you linked during setup. Enter the amount and confirm. Most transfers take one to three business days, though some banks take longer. PayPal does not charge you to withdraw to your bank account.
If someone paid you for goods or services rather than as a personal transfer, PayPal automatically deducted its fee (2.2% plus $0.30) before the money hit your account. This is the only fee you pay as a receiver. If you dispute a transaction or a buyer claims they didn't receive what they paid for, PayPal may hold the money while it investigates—this can take up to 180 days in rare cases, though most disputes resolve in two to four weeks.
Linking and managing your payment methods
PayPal stores your bank account, debit card, and credit card information so you can send money without entering details each time. To add a payment method, go to "Wallet" or "Settings," find "Payment Methods," and click "Add a Card" or "Add a Bank Account." For a bank account, PayPal will ask for your routing number and account number—you can find these on a check or by logging into your bank's website.
You can set a preferred payment method so PayPal uses it by default when you send money. If your card expires or your bank account changes, update it in your settings so payments don't fail. If a payment fails because your card was declined or your bank rejected it, PayPal will notify you and you can retry with a different method.
If you want to remove a payment method, go to your wallet and delete it. You must keep at least one valid payment method on file to send money, though you can receive money without any payment method linked.
Understanding PayPal's buyer and seller protections
PayPal offers two separate protections depending on the type of transaction. Buyer Protection covers you if you pay for goods or services and the seller doesn't deliver or sends something significantly different from what was described. You can open a dispute within 180 days of the transaction. PayPal will ask the seller to respond, and if they don't or their response doesn't satisfy you, PayPal may refund you.
Seller Protection covers you if you're paid for goods or services and the buyer later claims they didn't receive it or didn't authorize the payment. To may have access to, you must ship to the address PayPal confirms, provide tracking information, and get a signature for high-value items. If a buyer disputes the transaction, PayPal reviews the tracking and signature proof before deciding.
Personal transfers between friends and family are not covered by either protection. If you send money to someone as a personal transfer and they don't send you the item or service you expected, PayPal will not refund you. This is why personal transfers should only be used for people you trust.
What happens if a payment fails or you need to cancel
If you send money and the recipient doesn't claim it within 30 days, PayPal automatically returns it to your account. If the recipient claims it but then their bank rejects the deposit, PayPal notifies you and the money goes back to your PayPal balance.
If you sent money by mistake or change your mind, you can cancel it before the recipient claims it. Log into your account, find the transaction in your history, and click "Cancel." Once the recipient claims the money or it's been transferred to their bank, you cannot cancel it. If you need the money back after that, you'll have to contact the recipient directly and ask them to send it back to you.
If someone sends you money and you want to refuse it, you can decline the payment before you claim it. Once you claim it or it sits in your account for 30 days, it's yours and you'll need to send it back manually if you want to return it.
Fees and costs at a glance
| Transaction Type | Cost to Sender | Cost to Receiver |
|---|---|---|
| Personal transfer (bank account or PayPal balance) | Free | Free |
| Personal transfer (credit or debit card) | 2.2% + $0.30 | Free |
| Payment for goods or services | Free | 2.2% + $0.30 |
| Withdrawal to bank account | Free | N/A |
| International transfer | Varies by country (typically 2% to 3% plus $0.99 to $4.99) | Varies by country |
Frequently Asked Questions
Can I send money to someone who doesn't have a PayPal account?
Yes. Enter their email address or phone number, and PayPal sends them a notification asking them to claim the money. They can claim it without opening a full account, though they'll need to provide basic information like their name and address. If they don't claim it within 30 days, the money returns to your account.
How long does it take for money to arrive in someone's bank account?
When you send money, it reaches the recipient's PayPal account when ready. If they transfer it to their bank, the deposit usually takes one to three business days depending on their bank. Weekends and holidays can add time.
What if I'm charged a fee I don't think I should have paid?
Log into your account and find the transaction in your history. Click on it and look for "Report a Problem." Describe the issue and PayPal will review it. If you used a credit card and were charged the 2.2% plus $0.30 fee for a personal transfer when you meant to use your bank account, contact PayPal and they may refund the fee as a one-time courtesy.
Is PayPal safe to use?
PayPal encrypts your information and uses fraud detection to flag unusual activity. Your bank details are not shared with the people you pay. However, if someone gains access to your PayPal password, they can send money from your account. Use a strong, unique password and enable two-factor authentication in your security settings.
Can I get my money back if I sent it to the wrong person?
If the recipient hasn't claimed it yet, you can cancel the payment. If they've already claimed it or transferred it to their bank, you cannot cancel it through PayPal. You'll need to contact the recipient directly and ask them to send the money back. If they refuse and you paid for goods or services, you can open a dispute within 180 days.