How Does Paypal Work?

Joining Paypal is just the beginning and the benefits outweigh any fees charged to sellers. There’s no charge to the buyer to pay for an online purchase — or to send money to anyone. If you have noticed, Wealthy Affiliate prefers to use PayPal to send us money we earned through commissions or otherwise.

The Paypal process is not just for e-business. Let's say I owe you $20 from dinner last night or if two friends made a bet on a NCAA Football game, if both parties were PayPal clients, the loser can pay off the bet using PayPal.

How Does Paypal Make Their Money?

Paypal makes their money through the fees they charge depending on the type of transaction and where the transaction takes place.

Buying is free. Whether you buy something online or send money to someone, it is free for you. However, selling is not free. Sellers pay 2.9% plus $0.30 per sale. There are discounted rates for eligible non-profits of 2.2% International sales (any country outside the USA) are hit harder with a 3.9% transaction fee plus a fixed fee based on the currency. I know many of you here at Wealthy Affiliate, are considered international and thus will be hit harder. I know it seems unfair, but I am just the messenger. :)

Sending money to friends and family is free in the US for both you and the recipient when you fund the transfer with your bank account or PayPal balance. However, if you use a credit or debit card it is 2.9% plus $0.30 per transaction.

Here is the breakdown of the fees: