Get Started with PayPal: How It Works, Signing Up & More

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The complete beginner's guide to PayPal

Co-authored by wikiHow Staff

Last Updated: June 8, 2024 Tested

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Signing Up

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Sending Money and Spending

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Receiving Money

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Troubleshooting

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Video

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Q&A

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Tips

Want to get started with PayPal but don't know where to begin? PayPal is the most popular payment processing site in the world and currently provides service to over 325 million people in 200 different countries.^{[1]
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Research source} You can use PayPal to send money to friends and family, shop online securely, and even send invoices and payment requests. This wikiHow article will teach you how to use PayPal, covering everything from signing up for an account to sending and receiving money.

Making Online Payments with PayPal

Sign up for a free account at https://www.paypal.com, or by installing the PayPal mobile app on your Android, iPhone, or iPad.
Link your bank account and/or debit card to start shopping online securely with PayPal.
You can add money to your PayPal account by transferring it from your bank, depositing a check, or using PayPal Cash in a participating store.

Section 1 of 4:

Signing Up

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To create your account, go to the PayPal homepage. Click the "Sign Up" button on the upper right-hand corner of the screen.
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Decide between a personal and business account. PayPal will immediately ask you to choose between a personal and a business account.
- A personal account is best for online shopping and exchanging money with friends and family members.
- A business account is the better option if you're using PayPal to transfer money for professional services, especially if you're setting up an account for multiple people from a single company.^{[2]
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Set up your email. PayPal doesn't require you to create a username, but you need to link one e-mail address to your PayPal account.
- The e-mail address you use is up to you. Just make sure it's an address you use often and can easily log into to get notifications about when your money comes through.
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Add your phone number. This is a must to create a PayPal account since you need to send and receive codes from PayPal via text message.^{[3]
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Research source} When you add your number, click Next to continue.
- You will receive a text from PayPal on your phone that you need to enter into the site to continue.
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Add your password. You'll need to set up a secure password.
- You will give PayPal a lot of sensitive information, so make sure your password is secure. Use a combination of upper and lower case letters as well as numbers and special characters (like #, !, @, etc.). A random string of numbers, letters, and special characters (i.e., 13b%E56s$T89!) is generally better than a recognizable word (i.e., HaPPy123!).
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Provide basic information. After you set up your password, you'll be redirected to a page asking for basic information. Provide PayPal with information such as your name, birth date, and address.
- Click Agree and Create Account to continue.
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Choose what to do first. Select an option between Send money, Get paid, or Shop online. Regardless of what you pick, you will be prompted to link a card to your account.
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Enter your card payment details. Using the fields provided, enter the card number, card type (this usually fills in automatically), expiration date, security code or CVC, and billing address.
- Click Link Card to continue.
- If you want to add more cards or payment methods in the future, go to Wallet > Link Card/Bank Account
- Each time you send or receive money, you can log into this account. You don't have to go through this process more than one time!

Section 2 of 4:

Sending Money and Spending

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1
Deposit money. Even if your PayPal is empty, PayPal can draw from your bank to make payments. However, some people prefer to have money in their PayPal account itself. To put money in your PayPal account, log onto your account and then click "Transfer Money" on your dashboard or on the Wallet page. You can then transfer money to your PayPal account through the bank account linked to your account.^{[4]
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- You can also add money to your account using PayPal Cash at a store, or by depositing a check.
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Send money to others via PayPal. If you owe someone money, it's easy to send it via PayPal. Simply click the "Send and Request" option. Enter the amount and the e-mail address of the person who's receiving the money. Then, hit "Send."^{[5]
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- Make sure you use the correct e-mail address. The e-mail address you use should be the e-mail the other person uses for PayPal.
- You can easily send money to a family member using PayPal and a credit card using this step.
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Make online purchases using PayPal. Many sites have a "Pay with PayPal" button at checkout. If you choose this button, you usually just have to enter the e-mail address associated with your account to pay. This can be a lot quicker than entering credit card information.^{[6]
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- Some services allow you to pay bills with PayPal, like Netflix and Hulu.
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Transfer money into your bank account. Once the money is in your PayPal account, you can withdraw it at any time. Hit the "Transfer" button and then transfer your money directly into the bank account linked with your PayPal. This takes about one business day.
- You can also choose to transfer your money within minutes using a linked debit card for a small fee, usually 1.75% of the amount transferred. This form of transfer is typically completed within 30 minutes.^{[7]
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Get a PayPal debit card if you use PayPal frequently. A PayPal debit card works like a regular debit card, but it takes money directly from your PayPal account. It's best if you need immediate access to your PayPal money. It's accepted anywhere that takes cards, as well as most ATMs. You can withdraw up to $400 a day if you use a PayPal debit card.
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Cancel a PayPal payment if it’s still pending. If you made a mistake in your payment to another user, go to your PayPal account and click on the Activity page. Find the pending payment, which should show a status of “Unclaimed.” Under the payment, click “Cancel,” then “Cancel Payment.”^{[8]
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- If the payment has already been accepted, contact the recipient to request a refund.

Section 3 of 4:

Receiving Money

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1
Give people the e-mail associated with your PayPal account. If you want people to give you money via PayPal, they will need your e-mail address. Make sure when requesting to receive money via PayPal you give people the e-mail address associated with your account and not a different address.^{[9]
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Request money via PayPal. You can send requests for money through PayPal by logging into your account. Click "Send and Request", then "Request."
- Enter the e-mail or phone number of the person you're requesting it from, then click Next and enter the amount of money you wish to receive. Click Request Now for them to receive the request.^{[10]
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- The other person only needs to accept or approve the request in order to send the money to the requester.
- This is a good tool if you need to send someone a gentle reminder they owe you money. For example, if a friend borrowed money from you for something, you can send them a reminder of the amount via PayPal.
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Send invoices via PayPal. If you do any kind of freelance work, you can easily invoice your hours using PayPal. In the "Send and Request" tab, you can select "Send an invoice" from the menu on the right side of the page.
- Fill out a form where you provide details of the services you provided, your hours, your rates, and the total amount owed.^{[11]
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Link PayPal with sites you sell on. If you sell things online, with sellers like eBay, Facebook Marketplace, and Amazon, most sites will allow you to link your account to your PayPal. This way, when customers make purchases, their money will automatically be directed to your PayPal account. Every site has a different procedure for linking your PayPal account, but you usually just need to enter the e-mail associated with your PayPal and possibly some personal information.
- Expect a fee to be deducted from most invoices and sales. If you use PayPal as an online merchant or as a way to invoice an employer, a fee of 2.9% + $0.30 will be deducted from your final payment. To get around this fee, calculate it into your price or invoice by multiplying your desired price by 0.029, then adding $0.30.^{[12]
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- If you’re transferring money between friends and family with a linked credit card, you’ll be charged the same fee. If you’re using a linked bank account, you won’t be charged a fee.
- For a full, detailed list of fees in all countries and for different kinds of companies, visit PayPal’s fee page here: https://www.paypal.com/en/webapps/mpp/paypal-fees

Section 4 of 4:

Troubleshooting

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1
Contact PayPal if your account is locked. If you get a message saying that your account is locked, call or email PayPal’s customer service.
- Log in before contacting them to make the process faster. Be ready to provide your phone number, email address, and a statement from the card or bank linked to your account so that the PayPal employee can confirm that you own your account.^{[13]
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- You can call PayPal from the US at 1-888-221-1161, or from outside the US at 1-402-935-2050. This is the recommended form of contact for a locked account.
- To email PayPal, go to this link and log in: https://www.paypal.com/us/selfhelp/contact/email
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Check that your card is correct if your payment was declined. Make sure your card hasn’t expired and has the correct billing address. Update it as needed through your account. If that’s not the issue, check your PayPal Wallet page. If you see a “Confirm Credit Card” link, click it and confirm your card.^{[14]
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- If your card information is correct and has already been confirmed, make sure your recipient has confirmed their PayPal information and that their account is fully set up. You can also change or add a new payment method to your account and use that instead.
- If all else fails, call your card company or bank. Explain that a payment through PayPal has been declined and ask what you can do to send it through.
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Click “Having trouble logging in” if you forgot your password. You’ll be prompted to type in the email address used for your PayPal account. Click “Next,” then choose a method to recover your password. You could choose to receive a call, text, or email, answer a security question, or confirm your account through Facebook Messenger.^{[15]
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- PayPal will prompt you differently based on your choice. Follow the next steps carefully to get into your account.
- If you’re having trouble, call PayPal from the US at 1-888-221-1161, or from outside the US at 1-402-935-2050.
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Change your password by going to the Security tab and clicking “Edit.” You’ll see the Security tab right below your name on your Profile, and “Edit” will be right next to “Password.” You’ll be asked to confirm your current password, then to enter your new password twice. Click “Change Password” when you’re done.^{[16]
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- You can also change your security questions in the Security tab. Click “Edit” right next to “Security questions.”
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Look out for online scams. If you’re selling an item on a site like Craigslist, be aware of people that promise to pay you through PayPal but don’t follow through. If you see any red flags, stop communication with the buyer. Some common warning signs to look out for include:^{[17]
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- The buyer saying that can’t meet you in person or speak with you on the phone.
- The buyer offers more money than you asked for.
- The buyer requesting that you sent the item or money to a shipping agent, or through Western Union or MoneyGram.
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Recognize and report fake PayPal emails. If you receive an email that appears to come from PayPal, check it over carefully before you click any of its links. If the email says you’ve received a payment, check your PayPal account to see if the payment shows up. If it does, the payment and the email are legitimate. If not, forward the email to spoof@paypal.com. Other red flags to watch out for include:^{[18]
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- An email from PayPal that doesn’t include your first and last name
- An email that says a payment is on hold until you complete a requested action
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Go to the Help Center or community for more troubleshooting solutions. If you have more specific concerns, check out their Help Center for FAQs. To ask a specific question or see a wider range of solutions, log in to your account and go to the Community. You can also contact Customer Service directly by phone or email.
- You can access the Help Center here: https://www.paypal.com/us/selfhelp/home/
- If you want to ask the Community for help, go here: https://www.paypal-community.com/t5/PayPal-USA-Community/ct-p/US
- Call PayPal from the US at 1-888-221-1161, or from outside the US at 1-402-935-2050. Their customer service is available Monday-Friday from 5:00 am - 10:00 pm Pacific Time, and on the weekends from 6:00 am to 8:00 pm PT.
- To email PayPal, log in at this link: https://www.paypal.com/us/selfhelp/contact/email

Community Q&A

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Question

What happens if I buy something with PayPal that costs more than the amount of money in my bank account?

Community Answer

That depends on your bank. Either the transaction will be refused, or your bank account will drop below 0 and your bank may charge you an overdraft fee.

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What's the difference between "sending money to friends and family" and paying money for a "service"?

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Sending to friends and family ("Personal Payment") waives your buyer protection, so PayPal will not assist if you and the seller get into a dispute. Also, the person receiving money doesn't have to pay a fee to PayPal. Someone selling goods or services is not allowed to ask their customers to use the Personal Payment system, and may lose their ability to use PayPal if they're reported.

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What is my PayPal address?

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This refers to the email address you entered when you signed up for PayPal.

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Tips

Download the mobile app for Android, iPhone, and iPad to access your money in PayPal without having to use a computer.

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