Hey Pal, This is
PayPal!
I. How PayPal Works
PayPal is an ePayment system that can be used to
transfer money between two people on the Internet. PayPal serves as a middleman
between buyer and seller. Basically, PayPal is a free service for buyer. The
way it works it quite simple. To set up account on PayPal, users only need to
give their e-mail address, a credit card number and bank account details. If
seller doesnÕt provide bank account information than they will not be able to
withdraw funds to their account. Buyers usually gives PayPal their sensitive
information such as credit card number or bank account, and then PayPal which
act as the mediator pays the seller without the seller seeing buyerÕs credit
card number. As for the seller, the payment sent by buyers is deposit directly
into the sellerÕs PayPal account, which can be transfer directly to sellerÕs
bank account anytime they wish. Recipient of funds would receive money in their
account and PayPal would debit the senderÕs account (credit card or bank
account) respectively. At this time, PayPal accepts funds in U.S. dollar,
Canadian dollar, Euro, Yen, Pound Sterling and Australian dollar.
How to send money:
1. Sign up for a PayPal account, if you don't
have one.
2. If you want to send money from your bank
account, get verified.
3. Log in to your PayPal account.
4. Click the Send Money tab.
5. Enter your recipient's email address and the
amount.
6. Review your transaction, and then send it.
How to request money:
1. Log in to your PayPal account.
2. Click the Request Money tab.
3. Enter your recipient's email address and the
amount you're requesting.
4. Your recipient gets an email and
instructions on how to pay you using PayPal.
How to receive money:
1. Receive an email from
PayPal saying you've gotten a payment.
2. Sign up for a PayPal account or just log in
to see the money added to your PayPal balance.
3. You can transfer the funds to a checking
account, request a check, or send the funds to someone else.
4. Or just log in to see the money added to your PayPal account balance.
Types of PayPal accounts offered:
- Personal account
Personal account
allows you to send money to other PayPal accounts using your credit/debit card,
direct bank transfer or your PayPal balance.
It also allows
users to receive money from other PayPal accounts but only if it comes from
their PayPal balance or via direct banks transfer from your bank account. In
other words, people cannot pay if their payment is funded via debit/credit
card. Or rather, they can but to accept the payment you have to upgrade to
Premier. Personal accounts are also subject to volume limits of $500 per
month. If users receive more than that, they will need to upgrade to a Premier
or Business account (or deny the transfer that would have put them over the
limit).
There is virtually
no charge associated with Personal account: sending money is always free;
receiving money (funded by PayPal balance or bank transfer) is also free.
- Premier Account
Premier account can be registered with a business, group or
individual. It is allows users to do
all that the Personal account plus payments by credit and debit card.
One user can have
one Personal and one Premier account, which can be useful. User doesnÕt need a
separate email address and bank/card for each of them, though.
There is an
additional benefit to having two PayPal accounts, which is that you can send
money from one to another instantaneously while if you need to Ôadd fundsÕ it
takes several days.
Premier account can only be downgraded once
to the Personal status.
Once
you have
a Premium account PayPal provides a host of extra features for online sellers.
Some seem to be US oriented (e.g. printing postal labels according to their
post standards), but some can be useful everywhere.
- Business account
Allow
users to
do business under a company or group name, accept all payment types for low
fees, and accept payment from customers without PayPal accounts.
Advantages of Premium and Business Account:
-
Accept unlimited
credit cards payment
-
Make mass payments
to hundreds of people at once
-
ATM/Debit Card
-
Subscription and
recurring payments
II. PayPal Infrastructure
PayPal guarantee its customer security of all
transaction. PayPal automatically encrypts users confidential information in
transit from usersÕ computer to PayPal computer using SSL or Secure Sockets
Layer protocol with an encryption key length of 128-bits (the highest level
commercially available). To help its customer keep out fraud, PayPal also use
AVS (Address Verification System) that will check the
billing address of the credit card provided by the user with the address on
file at the credit card company and CVV2 (Card Verification Value)
checks. CVV2 is a 3 or 4 digit value printed on credit card.
Card Verification Value
CVV is an anti-fraud security feature to help
verify that the person using the credit card physically possesses the card.
Address Verification System
AVS used primarily in the U.S and Canada, with
some limited use in other countries. AVS matches the number portions of the
customerÕs known billing address on file at the cardholderÕs issuing bank
against the billing address in Virtual Terminal.
There are lots of little extras on the
site such as Postage and Tax calculators, numerous features to help you manage
your money and free tools for eBay sellers. It also has the so-called PPCal or
PayPal calculator. PayPal Calculator is Unix compatible. CGI script -
integrates price calculation and order submission from merchant site to your
PayPal account. Applications are numerous. PPCal can be easily customized to
serve any purpose, associated with PayPal payment.
--Designs--
Paypal.com features a great professional
design; it is shades of blue with a white background. It is actually quite
plain, but works very well. Everything is clear with the blue and black text.
The scripts that control all the transactions must be some of the best
programmed as you are assured that the web site is secure. The design has
recently been updated with a log in option on the main page where users can
enter their details.
--Navigation--
Navigation is very simple and easy to
use. In the top right hand corner there are three links, sign up, log in and
help. The main navigation of the web site is done with tabs, which you click
and extra links appear below. Everything that is needed is supplied in tabs and
subtabs on the top of each page that allows for quick access to all areas of
the website. Each page has a very nice layout without being crammed together
which is very easy on the eyes. A great navigational system, everything is easy to
find and access.
--Hardware—
Now, users around the world not only
able to access PayPal from computers but also from their mobile phone. This new
features of PayPal enables users to send money to family and friends, pay or
collect dues and fees, give a gift by phone, pay for person-to-person sales
without cash or a check and chip in for meals without carrying cash. This
system can be done with two ways:
By text
1. Text to 729725 (PAYPAL) with the amount and recipientÕs phone number
or email address. Use the commands ŌsendĶ and Ōto.Ķ
Example: Send 5 to 4150001234
Example: Send 5 to name@domain.com
2. When PayPal calls you back, enter your PIN to confirm.
3. PayPal immediately notifies your recipient of the payment and tells
them how to claim it.
By Voice
1. Call our automated voice response system at 1-800-4PAYPAL
(1-800-472-9725)
2. Enter your mobile PIN. Enter the amount and phone number (or email
address) when prompted.
3. PayPal immediately notifies your recipient of the payment and tells
them how to claim it.
Currently, this mobile transaction system can only
be used in US, Canada and. All of the mobile transactions are PIN-protected, it
makes the user account secure even if userÕs mobile phone is lost or stolen.
IBiz PayPal Integrator
IBiz PayPal Integrator includes
components that access PayPal merchant services for building fully integrated
e-commerce solutions. The components in IBiz PayPal Integrator summarize common
PayPal merchant functionality including direct payments, transaction
processing, customer verification, transaction searching, mass payments,
refunds, and more.
Features:
* Direct Payment Support - Process credit cards
via PayPal without sending customers to the PayPal site, and without requiring
customers have a PayPal account.
* Programmatic access to all major merchant
services exposed by PayPal.
* Easy-to-use API encapsulates all protocol
logic and security for accessing PayPal merchant services.
* Seamless transition from testing with the
PayPal sandbox to live account management and processing.
* 128-bit strong SSL encryption keeps sensitive
transaction information confidential.
* Small and lightweight components with no
dependencies on external libraries.
* Native development components for all
supported platforms and component technologies.
* Unlimited free Email technical support backed
by an experienced & professional staff.
* Includes everything needed to rapidly add
PayPal account management capabilities to your web or desktop applications,
including: extensive documentation, sample applications, integrated help, etc.
III. Advantages and Disadvantages of PayPal
Advantages
The most basic reason why many people use PayPal
is because it is easy to use, fast and convenient and secure
way for individuals and businesses to send and receive money online for goods,
services, charitable donations, etc. More than that, PayPal service has
other several of advantages.
1. Convenient and Trustable
Payments are sent and received quickly, quicker than
sending checks or money orders, no standing in line at the bank or post office.
Seller can withdraw funds
straight into their bank account and people are more likely to buy from a
seller if they can pay by PayPal. For merchant who sells from their own website
and wish to use PayPal as the payment method, PayPal provide tools to add
PayPal options such as PayPal logo, shopping baskets, check out options, buy
now button, etc. Usually when people see PayPal logo, they generally trust it.
2. Traceable
PayPal always
email user to notify users of any transaction made, received or requested.
Users are always kept informed of what is going on.
3.
Affordable
PayPal is
affordable for businesses of all sizes. Fees are applied only when user accepts
a payment. Sending funds are totally free.
4. Private
and Global
PayPal never reveals buyers financial
information to sellers. When users pay
using PayPal, the seller never sees their credit card or bank account numbers. PayPal is
accepted worldwide and can be used to make payments locally or internationally.
Disadvantages
1. Poor Customer Service
According to anti-PayPal website
paypalsucks.com, PayPal used to hide their phone numbers and only provided
support via form emails. After some lawsuits and a lot of bad publicity,
PayPalÕs phone number can now be found on their website. Want a customer
service hotline? You'll have to pay for a Premier account. Otherwise, e-mail
service contacts are all you get. This poor customer service also includes
extremely long wait times on the phone, very rude customer service
representatives, and the unwilling to help the seller in certain cases. They
come off with the attitude that they could care less about the customer.
2. Unregulated and Unsafe
Because PayPal doesn't consider itself
to be a credit card company or a bank, it isn't regulated by the consumer
protection laws of either of those two categories mentioned above. Many people
leave their money in their PayPal accounts like a bank and not realizing that
they don't have the FDIC protection (FSLIC protection for Savings and Loans)
nor consumer-banking laws protects them. If oneÕs account gets
hijacked, PayPal won't refund the lost money unless they are able to recover it
themselves from the hijacker.
The
use of the CVV2 cannot protect against phishing scams,
where the
cardholder is tricked into entering the CVV2 among other card details via a
fraudulent website. The growth in phishing has reduced the real-world effectiveness
of the CVV2 as an anti-fraud device. (Wikipedia, 2006)
3. Expensive for seller
For sellers, fees for accepting payment are quite
high, between 2.5% and 3%. This is a problem for low price items that sellers
sell. Here are the fees for accepting payments
through PayPal:
$0.01 USD-$3,000.00 USD costs customer
2.9% $0.30 USD
$3,000.01 USD-$10,000.00 USD costs
customer 2.5% $0.30 USD
$10,000.01 USD-$100,000.00 USD costs
customer 2.2% $0.30 USD
Over $100,000.00 USD costs customer
1.9% $0.30 USD
4. Worthless buyer and seller protection
Buyer protection support is terrible.
Some cases, youÕre not able to get money back even if itÕs clear that youÕve
been scammed. Unless they pay with a credit card and maintain their charge back
rights, the buyer protection plan is useless. Among the loopholes: if the seller
sends an empty box, buyer loses. If the seller empties their PayPal account
(and any scammer would), buyer loses.
5. Confusing Terms of Service
The current Terms Of Service state
that you agree to give up your right to file a lawsuit against PayPal and that
if you have a dispute, you must travel to California to visit a mediator of
PayPal's choosing which will then be binding.
Due to numbers of scams and credit cards fraud in
Indonesia, PayPal doesnÕt include Indonesia as country that can send or receive
money.
IV. Future Perspective and Long
Term Strategies
Currently, PayPal dominates e-mail
payments in the U.S. While most payments on PayPal are no-fee cash payments,
the desire for credit card protection by online auction buyers shows that
credit card fees will bring in the bulk of the profit.
Right now the PayPal model will work
because consumers need the service. It's just a matter of time before the
third-party nature of the credit card system-on the Web, at least-is
circumvented by the banks and credit institutions, which actually control money
and short-term consumer loans.
With the re-launched of PayPal # 1
rival, BidPay, which come back with freshly new feature where thereÕs no fees
for sending and receiving money plus buyer and seller protection, PayPal might
need to renovate its management system. Otherwise, PayPal dream to become
International standard ePayment system will be vanished.
Things that PayPal should fix
generally is the seller & buyer protection, customer service and of course
security system.
PayPal is a great hit with phishers,
users of the Internet who try and gather credit card and other information etc
by illegal means. The term comes from the word fishing as they use bait to try
and gather your information, the bait in this case being e-mails that ask you
for your details. Examples of e-mails include ones that ask you to log in to
your account through the e-mail by a form that is included, only to fill in the
forms and then your details are sent to another web site and logged so that can
have your log in details. The most recent and newest e-mail tells you that you
details and credit cards need updating and asks you for all your information.
This is one of the worst points about PayPal, it has become so popular by experienced
and newbie Internet users that it is a web site that is a targeted very often.
IÕm a seller and a buyer on eBay and
for now I only accept PayPal as the payment system. But then, I considered
adding other ePayment system for the sake of my buyers and myself. But for now,
I still do recommended PayPal as the most convenient ePayment system. In the
future, PayPal is going to provide international payments and provide ATM
cards, so that users (sellers) can get at their money even faster. PayPal are
even talking about paying interest.
References
Associate Programs
http://www.associateprograms.com/search/newsletter083.shtml
Cardservice International
http://www.995merchantaccounts.com/
Chesher, Mike (2003). Electronic
Business & Commerce. Springer (USA)
http://books.google.com/books?vid=ISBN185233584X&id=mRTllOUiaPYC&pg=PA58&lpg=PA58&dq=paypal+infrastructure&sig=9UCu9QLbK8esdAWsQw3mPly8X-Q
Ebay Australia
http://pages.ebay.com.au/help/buy/payment.html
NoPayPal
http://www.paypalsucks.com/
PayPal [online]
www.paypal.com
PayPal Warning
http://www.paypalwarning.com/
Swierczynski, Duane (2002). The Complete Idiot's Guide to Frauds,
Scams, and Cons. Alpha Books (USA)
http://books.google.com/books?vid=ISBN0028644158&id=cMsLAWpbR_0C&pg=PA62&lpg=PA62&dq=PayPal&sig=l1YoRJAieoJNAH7E4PHfuPjbW_s
