Advantages & Disadvantages Of Paypal That You Need To Know


When it comes to online business and purchasing products from the internet, PayPal has got to be the most famous online payment system in the world, because of its convenient way of sending and receiving money as an alternative to the real and traditional paper and check methods.

It is also considered to be the larger internet payment company in the entire world because it is used on several websites.

“Online business models are still evolving. New and different products and services pop up every day. This gives rise to supporting products and services. A business can make a substantial profit by helping others execute their plans for making money.” Marc Otrofsky
Paypal Logo

PayPal is an American company that serves as a payment processor for online business and auction websites that charge certain fees. It was actually founded in 1998 by Max Levchin, Peter Thiel, Ken Howery, and Luke Nosek. It was actually first launched as a money transfer service at Confinity, which was a company that was developing security software at that time. In 2000, they merged with, which is an online banking company, and that same year, decided to just focus on Paypal, renaming their company as the PayPal money service.

Since we are living in such a modern world, credit cards no are considered to be a little old school, and online banking and payment services are the ones that are cool, in the minds of the people, that is why almost everyone is so keen on using it. Some people are a little skeptical, which is totally understandable since we’re talking about money here. That is why, like every other company, it has its own advantages and disadvantages, and here are some of them.



One of the reasons why people love to use PayPal so much is that is indeed, very easy and incredibly convenient to use. It is easy because all you need to do is sign-up and provide the necessary security measures, which is for your own safety, then link your bank or credit card to your account then you can definitely use it right away to purchase products online.


It is very convenient since almost every online business is accepting PayPal. It can also be used for certain bills that need to be paid. PayPal is always one tap away from your phone since they have their own app, so everywhere you are in the world, you could use it, as long as you are connected to the internet.

Advantages & Disadvantages Of Paypal That You Need To Know


Another amazing advantage of PayPal is that it is used worldwide, with almost every currency on it, anyone can send money to anybody, without having to deal with mails and such. Its international services are simply amazing, but everything comes with fees, which we will be talking about in a bit.


PayPal guarantees an amazing security against fraud and at the same time it promises protection again unauthorized payments. When you join, they would need you to fill up specific information, as well as ask for your identification documents, to prove that you are actually who you say you are. PayPal also guarantees your account protection from unauthorized transactions, so you could totally be safe, especially while shopping online.



Since PayPal is not exactly a bank, it is not ideal to put a huge amount of money on your account despite the security measures. PayPal doesn’t exactly adhere to the law, and it is not even FDIC-insured. It also doesn’t meet any banking or financial regulations. It is important for you to understand that Pay is indeed a convenient and safe way to send and receive money, but it cannot be used as some form of a bank, where you can keep a big sum of money.


One of the worst things PayPal actually do, is that their conversion fees are totally absurd. It is understandable to put a certain amount of fee when it comes to sending money to a business, but the conversion fee for personal money exchange is totally unacceptable. A lot of people have indeed complained about it, but there is nothing they can do. They also have their own exchange rate system, which is lower than a certain country’s rates.


Advantages & Disadvantages Of Paypal That You Need To Know


PayPal can freeze anyone’s account, anytime, for whatever their reason may be. According to PayPal, they freeze certain accounts for the protection of other users, as well as to investigate that certain account, in case it is doing something illegal like sending thousands and thousands of dollars every single day. There is no landmark on how long can a certain account be frozen, which is indeed very inconvenient. Especially if the accounts were considered to be legitimate accounts.

No matter what kind of online payment service we try, keep in mind that you have to cautious and try not to put a lot of money on your accounts since everything that is computerized can be hacked, despite how secured it may be and there is a chance you could lose your hard-earned money. Just remember these advantages and disadvantages, and you’ll be fine.

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