Most people have heard of Paypal due to its continuing contribution as the main way of paying people on E-bay. Indeed E-bay purchased the company a few years ago now to provide secure payments for their online auction site. However it is often overlooked as a way to transfer money overseas with many people being unaware that they can transfer their money for virtually zero fee, whereas other money transfer companies such as MoneyGram and Xoom would take a hefty commission from you.
Paypal has well over 100 million people registered as users of their service and any serious online company accepts their method of payment. Basically Paypal have created a system whereby they can link together customers regular debit accounts and credit cards to their system securely, which is why it has become so popular so fast.
Whilst in theory anyone with an account can transfer money overseas instantly in practice it is not really the case. Firstly to set-up an account and send money you first have to register and verify an account with them in order to load money into your paypal account. This involves Paypal making two small deposits into your account which you then have to check the amounts of and then enter the amount so that they know it really is your account. This alone can take several days. Following this you would then have to upload money from your bank account to your Paypal account, this can also take up to ten days depending upon your banking system.
A few other words of warning for anyone wishing to use Paypal, their customer service doesn’t have the best reputation for dealing with queries particularly quickly or efficiently. There are often phishing scams related to using their service. This basically means that you are liable to receive a very convincing e-mail saying you need to update your information on your account or you will lose all your funds. The e-mail then includes a link which sends you to a fake site which then attempts to gain your personal bank details for use by other people.
If you wish to transfer money overseas then this can be very quick, cheap and efficient as their fees are very low and money is literally switched to another account as soon as the money is sent. Now this is fine if you which to spend that money online, you can do so instantly, getting it into your bank account then can take up-to ten days to be deposited into your account. The problems really begin when you need to transfer money to someone in asia who clearly don’t have a US/UK bank account. These people may literally not be able to get their hands on the money. Paypal has this to say:
Users in [these countries] cannot withdraw funds to their local bank account electronically or by paper check. They can withdraw funds to a U.S. bank account.”
So be very careful if you are planning on receiving payment in a country other than the US or Europe, you may not be able to get your hands on your hard earned money. This limitation has clearly led to much frustration particularly for freelancers who wish to work online in Asian countries and receive payments from overseas.
So to summarise whilst Paypal is a secure, fast and highly reputable payment/money transfer service it is not without it’s limitations so please be aware of this before you start using their services and read the small print.