What Is PayPal and How Does It Work With eBay?

eBay has millions of items for sale, but the only way to pay is with a payment system called Paypal. This payment system allows buyers to send money to sellers virtually, without involving personal checking, debit card, or credit card numbers. Paypal is safe, widely accepted, and seamless when paying for items online.
How Does Paypal Work With eBay Transactions?

When a buyer wins an auction, has a best-offer accepted, or purchases an item on Buy it Now at full price, the seller will send an invoice to the buyer. The process looks like this:
  1. Buyer Wins an Auction or Makes a Purchase. A bidder makes a purchase from a seller that accepts PayPal as a payment method.
  2. Winning Bidder Checks Out Using PayPal. From the My eBay page or on the item listing itself, the winning bidder, who is a member of PayPal, clicks on the "Pay Now" icon next to the completed listing.
  3. Money Is Moved Automatically. transfer of funds from their preferred payment method (either credit card or bank account) into his or her PayPal account. These funds are then immediately transferred to the seller's PayPal account. Or, as a Paypal member, you can leave a balance in your account to cover future purchases.
  4. Seller Receives Funds. With the funds now in their account, the seller is now free to either transfer them to his or her bank account(s), have a check mailed from PayPal, spend the money in the "real" world using a PayPal debit card, or use the PayPal balance to make other purchases online.

Benefits of Using Paypal

PayPal is a fast and easy way to buy things online. Paypal is the preferred method of payment on many shopping websites, besides just eBay. Paypal offers these seven benefits:
  1. Flexibility for Sellers. With a PayPal membership, even very small volume sellers can quickly and easily accept payments that originate from buyers' credit or debit cards.
  2. Speed. PayPal transfers between sellers are instant, and transfers from PayPal accounts to bank accounts can take as little as 24 hours.
  3. Affordability. The fee to use Paypal is 30 cents per transaction, plus 3% of the total amount of the transaction.
  4. Safe Buying. Because PayPal offers buyer guarantees and a specific process for disputing transactions, so users always have recourse whether they are a buyer who didn't get what they ordered or a seller who may worry she will be stiffed on payment.
  5. Acceptance Online. Paypal is now a common method of payment on many shopping websites, as well as websites that take payment for any other reason.