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How PayPal works

Wednesday, November 23, 2011 | Eva Pettifor |

How PayPal works

The following article summarises the process of setting up a PayPal account and what happens when a sale is made from your website

Get Started - Create a business account with PayPal

  • You will need to sign up with PayPal, signing up is free but like any payment gateway service they do have transaction fees. The fees are very reasonable and to view them, please see PayPal's website
  • You will then need to provide your web designer with the necessary details to connect PayPal to your website. If you are my client, please contact me for a detailed instruction list.

Add PayPal link to your website

Your web designer will do all of this for you and your website will be launched.

Your customer makes a purchase from your website

  • Your customer chooses to buy a product or service on your website
  • They click on your 'Buy Now' or 'Add to Cart' button and this takes them automatically to the PayPal screen to review billing and shipping information, and then pay with their credit or debit card on the PayPal secure server - all of their financial information (eg credit card number) is handled securely by PayPal and you will never see this private information.
  • The customer then reviews their PayPal payment information
  • The confirmation of payment page appears
  • Your customer receives a confirmation with all details via email and will await delivery of their product or service from you
  • At this point the customer will also receive a receipt generated from the website too

You will then be notified

  • When a sale goes through PayPal you will receive an email from PayPal automatically, you will be notified of the customer's name, address, and purchase details
  • You will also receive a notification from your website content management system
  • You can then login to your PayPal account to see the deposit and sales details which will be available instantly (minus the small fee that PayPal deducts)
  • At this point you would dispatch the product to your customer and it is often nice to contact them via email to let them know you are processing their sale

You can then access your funds

  • You can leave the funds in your PayPal account, use your PayPal balance to make your own purchases that use PayPal as a payment method, or transfer these funds to your own bank account which is saved within your PayPal account settings. If you transfer the funds to your bank account, it will take a few days to clear, like any other bank transfer. The transfer itself is free.
  • When your PayPal balance reaches the first $1000, you will be notified by PayPal to prove that you operate a legitimate business. This is a one time verification process and PayPal will step you through the requirements. I recommend that you verify your bank account at initial signup process to save the hassle of doing this later.

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Copyright Eva Pettifor, Darwin Web Design. Please seek my permission prior to reproducing this article in any way but feel free to link directly to this page if you wish to use this content - thanks!

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