PayPal Holding Corporation is an American-based organization that operates worldwide in the financial sector of businesses. The system supports online transfers of money while at the same time serving as an electronic alternative to the traditional paper means of payment, such as money orders and checks. The incorporation performs as a payment processor for auction sites, online vendors as well as other commercial users. A small fee is charged after the services are used, offering a wide array of benefits.
When concerns about receiving payments online surface, PayPal remains the best and most preferred means. The system offers an opportunity to both people as well as well as important business organizations a tool and platform to make payments online with immediate access to the money for the receiver. Other than the tiered account levels provided for both small and large business ventures, PayPal also offers a couple of significant features that facilitate easier management and funds accessibility. The two primary uses of PayPal in the market are making payments for goods purchased by customers and receiving money from people or business entities for goods and services offered (“Paypal introduces code changing tokens”, 2007).
As mentioned earlier, the system has a wide range of benefits. One is the flexibility in online payment. While new merchants, as well as other people, see it as tricky to get paid online, PayPal gets rid of the insecurities by allowing one to take money from other PayPal accounts as well as giving the customers an option to make payments via the credit card. Users can send funds by email, or they can use the features of e-commerce to add shopping carts and buttons to their websites. Most businesses earn credibility from the visitors to their site since most people tend to trust the PayPal name. Taking into account technological advancements, the company intends to launch smartphone credit cards, which allow people to make payments via credit cards regardless of the areas they are in (Tomic, 2014).
PayPal also allows easy access to money. Once a person or a business has received money, they can quickly move and use it once granted access to it. The funds can be transferred to the linked bank, if any, in a process that takes three to four business days for the money to mature for withdrawal and use. In instances where one has signed up for a free PayPal debit card, they can use it as a debit card wherever they are accepted, including in ATMs to withdraw cash (“Paypal introduces code changing tokens”, 2007).
PayPal is also advantageous as it blurs bank lines. Despite the fact that PayPal is not a bank, it plays the same role as one while not adhering to the rules and regulations of banks. Money available in a PayPal account is not insured against FDIC, but it offers these protections in the form of FDIC pass-through insurance, which secures money transfers to the banks. In this case, the policy outlines that the FDIC pass-through deposits cover safeguards only against the failure of the banks to which the PayPal system makes deposits but does not cover anyone against insolvency acts involving PayPal (Tomic, 2014).
In conclusion, the PayPal payment system is a revolutionary technology that facilitates easy and fast sending and accessibility of money, thus making business transactions easier. It also enables one to choose a method they prefer, such as linking to the bank or using it as a debit card.
References
Paypal introduces code changing tokens. (2007). Computer Fraud & Security, 2007(2), 3. http://dx.doi.org/10.1016/s1361-3723(07)70013-1
Tomic, N. (2014). Characteristics and functioning of PayPal system. Megatrend Revija, 11(2), 255-270. http://dx.doi.org/10.5937/megrev1402255t
