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How works paypal?
PayPal can not be considered as a bank, because of the way they operate and therefore not governed by the same laws that the banks, which means that users are less protected legally comparison to banks (both buyers as sellers). However, in Europe, Paypal Ltd. operates as a bank based in Luxembourg. Although not governed by the same rules, PayPal has to obey rules of the Department of the Treasury of the United States of America and the Financial Services Authority of the European Union. Some of the rules are money laundering, unauthorized transactions (Reg E).
Unlike traditional banks, where the customer receives a return for having your money deposited into your account, PayPal does not offer any interest in this concept, existing only expense of the client when it performs certain transactions (among others, to move money from PayPal to a bank or a payment from a sale on eBay). In addition, PayPal will not personally guarantee any operation, and the money of a transaction is recoverable only out only if the other party agrees to it.
For the peculiar method of operation of Paypal, do not allow use to buy items on eBay non-physical (such as ebooks, domains or non-tangible items), but in practice is one commonly used for this purpose use. For each transaction, Paypal charges a fee between 3% and 4%, the recipient of money, and a Euro if you want to transfer money into an actual physical count (unless it is transferred 100 Euros with no commission). Before allowing him to have, keep it locked for 21 days. These nuances are enough developers to ensure that PayPal is not a bank nor a theoretical or practical level (although not lend money itself claims about high commissions, and always use the capital of the seller and the buyer only without using capital or endorse the transactions). For these reasons it is extremely insecure if one of the two sides go in bad faith or failure in the operation. Nor has systems that can ensure the operation, unlike other traditional payment methods as most credit cards, even though it charged the same commission (about 4%) that these entities.
PayPal also receives money to implement the conversion of currency (usually 5%, consisting of a variable rate as "the foreign exchange market conditions" plus a fixed rate of 2.5%). Although at the time of pay in a currency other than the principal, PayPal allows the currency exchange is provided by the institution credit card, by default the option that comes in is to allow Paypal to make this conversion. Therefore, a conversion is applied with a commission of up to 5% of the amount to be charged by credit card. This is another way in which income is received Paypal.
In summary, PayPal charges for the concepts of:
By a commission to the seller to use PayPal as a platform for recovery.
By a commission to the seller to withdraw funds to your checking account.
By a commission to the buyer to conduct the currency conversion when you buy in a different currency.
By a commission to the seller to withdraw funds to your checking account in a currency other than your primary currency when you register.
PayPal does not charge for the concepts of:
Make a payment to another person or company (the buyer pays no more than the price set by the seller).
Load money into Paypal account.
Opening multiple accounts in different currencies where within PayPal.
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