PayPal

A A A

DEFINITION

An electronic commerce (e-commerce) company that facilitates payments between parties through online funds transfers. PayPal allows customers to establish an account on its website, which is connected to a user's credit card or checking account. Once identification and proof of funds have been confirmed, a user may begin sending or receiving payments to and from other PayPal accounts. PayPal attempts to make online purchases safer by providing a form of payment that does not require the payor or payee to disclose credit card or bank account numbers.

INVESTOPEDIA EXPLAINS

PayPal broke into the mainstream when it appeared as a payment facilitator for eBay auctions. The service became so popular that eBay decided to acquire PayPal in 2002, making it the official transfer service for its website.

Although PayPal is not a bank, it is still subject to many of the same consumer protection regulations by which banks are governed. For example, under banking regulations, the extent of your liability for an unauthorized transaction is determined by how promptly you notify the bank that unauthorized activity has occurred in your account. Notifying PayPal quickly when you have concerns will help to limit your liability, and it is recommended that PayPal users check their accounts regularly.


RELATED TERMS
  1. Electronic Commerce - ecommerce

    A type of business model, or segment of a larger business model, that enables ...
  2. Email Money Transfer - EMT

    A retail banking service that allows users to transfer funds between personal ...
  3. Bank

    A financial institution licensed as a receiver of deposits. There are two types ...
  4. Checking Account

    A transactional deposit account held at a financial institution that allows ...
  5. Wire Transfer

    An electronic transfer of funds across a network administered by hundreds of ...
  6. Online Banking

    The performance of banking activities via the Internet. Online banking is also ...
  7. Retail Banking

    Typical mass-market banking in which individual customers use local branches ...
  8. Identity Theft

    The crime of obtaining the personal or financial information of another person ...
  9. Phishing

    A method of identity theft carried out through the creation of a website that ...
  10. Bank Giro Transfer

    A method of transferring money by instructing a bank to directly transfer funds ...
Related Articles
  1. Choose To Beat The Bank
    Options & Futures

    Choose To Beat The Bank

  2. Tips For Keeping Your Financial Data ...
    Personal Finance

    Tips For Keeping Your Financial Data ...

  3. Are credit cards and debit cards considered ...
    Credit & Loans

    Are credit cards and debit cards considered ...

  4. What are the advantages and disadvantages ...
    Investing

    What are the advantages and disadvantages ...

  5. How does online banking assist with ...
    Budgeting

    How does online banking assist with ...

  6. Top 7 Most Common Financial Mistakes
    Options & Futures

    Top 7 Most Common Financial Mistakes

  7. Websites That Save You Money On Hotel ...
    Personal Finance

    Websites That Save You Money On Hotel ...

  8. How We'll All Be Amazon.com Customers ...
    Investing News

    How We'll All Be Amazon.com Customers ...

  9. Six Things To Buy AFTER Christmas
    Personal Finance

    Six Things To Buy AFTER Christmas

  10. Eight Smart Ways To Save On Gift Giving ...
    Personal Finance

    Eight Smart Ways To Save On Gift Giving ...

comments powered by Disqus
Hot Definitions
  1. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
  2. Degree Of Financial Leverage - DFL

    A ratio that measures the sensitivity of a company’s earnings per share (EPS) to fluctuations in its operating income, as a result of changes in its capital structure. Degree of Financial Leverage (DFL) measures the percentage change in EPS for a unit change in earnings before interest and taxes (EBIT).
  3. Jeff Bezos

    Self-made billionaire Jeff Bezos is famous for founding online retail giant Amazon.com.
  4. Re-fracking

    Re-fracking is the practice of returning to older wells that had been fracked in the recent past to capitalize on newer, more effective extraction technology. Re-fracking can be effective on especially tight oil deposits – where the shale products low yields – to extend their productivity.
  5. TIMP (acronym)

    'TIMP' is an acronym that stands for 'Turkey, Indonesia, Mexico and Philippines.' Similar to BRIC (Brazil, Russia, India and China), the acronym was coined by and investor/economist to group fast-growing emerging market economies in similar states of economic development.
  6. Pension Risk Transfer

    When a defined benefit pension provider offloads some or all of the plan’s risk – e.g.: retirement payment liabilities to former employee beneficiaries. The plan sponsor can do this by offering vested plan participants a lump-sum payment to voluntarily leave the plan, or by negotiating with an insurance company to take on the responsibility for paying benefits.
Trading Center