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eBay School: PayPal

Signing up for a PayPal account
by Gisle Hannemyr
Published: 2010-08-25.

After you've established your eBay account, you need to establish a PayPal account (unless you already have one, in which case you do not this lesson).

As an eBay user, you will need to be signed up for PayPal in order pay for stuff you buy, and receive payment for stuff you sell.

You will need some instrument to fund your PayPal account. I strongly recommend that you use a credit card for this (I'll tell you why later), but you may use a debit card – or even bank giro transfer – instead.

Signing up for PayPal is a simple process and it costs you nothing. I shall outline all the required steps below, one step at a time.

You can delay signing up for PayPal until you actually need it to carry through a transaction. But there is no reason to wait. By signing up for PayPal at the same time you sign up for eBay, you are ready to use the service at any time.

1. How to sign up for PayPal

Below, I explain how to sign up for PayPal in six easy steps. Take your time and make sure you understand each step before completing it.

Step 1: Click “Sign up” on PayPal's front page

You start the process by going to PayPal's front page. Click this link to go there.

Near the top, in the centre of PayPal's front page, you should see a link that says “Sign Up”. To sign up for PayPal, you should click on this link (circled in red in image below). This begins the registration process.

PayPal welcome screen.
Centre top of PayPal welcome screen. Click “Sign up” to begin the registration process.

The screen-dump above is for Microsoft Internet Explorer. The address field (this the field that shows the URL of the website you are visiting, in this case it is the green field containing the text “”) may look slightly different in other web browsers, but in all browsers the URL should start with the five characters “https”. This tells you that you are accessing an secure site and that any data sent between that site and your browser is encrypted. When accessing a page for financial transactions, it is important that the site is secure, so learn how to recognise a secure site in the web browser you prefer to use.

Step 2: Select account type

After clicking “Sign Up”, you are taken to a page to select your country or region, the language you prefer, and the type of account you want. This page is shown below:

Step 2 screen.
The PayPal dialogue to select an account type.

You pick the country or region that you reside in, and whatever language you prefer.

A “Personal” PayPal account is designed to let you pay for goods by means of PayPal. It also lets you send money to, and receive money from, friends. To sell goods, subscriptions and services, you will need a “Premier” or “Business” account. A “Premier” account is for one person doing business, and a “Business” account is for a company where several people may need to access the account.

For now, pick “Personal” account type. This is the simplest type account, and probably all you need for now. If you need a “Premier” or “Business” account, you can always upgrade later.

So to complete this step, just click “Get Started” in the box headed “Personal” to proceed to the next step.

Step 3: Enter personal information and agree to terms

After clicking on the “Get Started” link in Step 2, PayPal asks you to complete a web form. This form asks for various kinds of personal information, providing PayPal with enough information to open a personal account for you.

The fields that appear in this form is to some extent depend upon what country or region you selected in the previous step, but each field is clearly labelled.

The first field is always your email address. This address will also be the id you use to log in on PayPal. PayPal will send important messages to this address, so make sure it is a valid one.

For a password, it should at least be eight characters long and should not contain any spaces. For best password security, pick one that is a mix of upper and lower case letters, and also contains at least one number. Unlike regular banks, PayPal do not use any additional authentication methods by default. Picking a secure password is therefore very important to safeguard your PayPal account. (For USD 5 plus the cost of a receiving device, you can purchase a security key for extra protection.)

Other fields on this page will be your first and last name, and your address. These fields will later be used as your shipping address, so it pays to fill them in accurately.

Near the bottom of this screen, there are two important links to the PayPal User Agree­ment and Privacy Policy. These are the terms you have to agree with to use PayPal. Make sure that you read both documents carefully and understand what you agree to before you click on the button: “Agree and Create Account”.

Clicking on this button creates your PayPal account.

An email is sent to your email address. PayPal require that you confirm that your email address is valid. The mail contains a confirmation code that you must enter after you log into your account for the first time.

Step 4: Go to your account

Your PayPal account is now set up. PayPal now want you to put money into your account, but there is no need to do that yet. You can always put money into account. If you use a credit card to make this payment, you can wait until after you've purchased something, and just pay the exact amount.

Step 4 screen.
The PayPal screen to go to your account.

Just ignore the large boxes to top up the account or pay with a credit card, and instead click on the small blue link with the text “Go To My account” near the bottom of the screen. This will take you directly to your newly created PayPal account, which will look something like this:

Account overview.
This how the account overview screen (“My Account”) of a new PayPal account may look like.

Take a look at the box headed “Notifications” on the right. It contains the links that you may need in the two remaining steps.

Step 5: Confirm your email address

PayPal need to verify that you are the owner of the email address connected to your PayPal account, so you'll have to confirm your email address to complete the registration process.

Once you've successfully created your account, check your email box for a message from PayPal with the subject “Welcome to PayPal”. It usually just takes less than a minute to arrive. Once the message arrives, open the message and look for a link with the text “Edit my information” or a button marked “Activate”. Click on that link. This should take you to a secure page where you enter your PayPal password. After you've entered your PayPal password, you will be logged onto the PayPal page where you can edit your address an other personal information. Correct any fields you want to change, or just click on the “My Account” tab to go to your account's overview page.

If you you for some reason can't use the link or button that is embedded in the email, just log on to your PayPal account and click the link “Confirm email address”. This takes you to an alternative path for confirming your email address. On this page click on the link with the text: “Click here if the button does not appear in the email. ” You will be taken to a page where there is a field to enter the confirmation code you received in email. Look in the email you received for a field marked “Confirmation Code.” and copy code this into text box on the webpage. Then press “Confirm” to confirm your email address.

Step 6: Pick security questions

Now, you are almost done. However PayPal also wants you to pick two security questions. These are preset questions that only you should be able to answer correctly.

You can do this up by clicking on the link “Set up your security questions” in the notifications box on your PayPal account overview page. PayPal is going to bug you about this every time you log in, so it is best to just get it over with. The screen to select the security questions look like this.

Step 6 screen.
PayPal dialogue to set up two security questions.

You pick two questions from the pull-down menus, type in the answers you will give to these questions, and click “Submit”. This completes the process of setting up a personal PayPal account.

PayPal will use these question in some cases as an extra security measure to authenticate you.

2. How to pay with PayPal

To pay with PayPal, there must be sufficient funds in your PayPal account to cover the purchase. However, there is little point in putting funds into your PayPal account before you need them. They earn no interest, and they can be stolen if somebody manages to break into your PayPal account. I always keep the balance in my PayPal account at zero, and only transfer funds after I've purchased something.

PayPal provides no less than three alternative methods for putting money into your PayPal account:

  1. Pay with credit card. PayPal accepts payments by means of the following credit cards: Mastercard, Visa and American Express. To use this type of payment, you just give PayPal the necessary information as part of the payment procedure to charge your credit card. The charge takes place immedately, which means that you can proceed with checkout immedately. When you get your credit card bill, the merchant name that appear on the bill is that of the merchant that sold you the goods, not PayPal.
  2. Pay with debit card. A debit card works just like a credit card, except that it is tied to your bank account and there is no credit involved. When you pay with a debit card, the payment appears on your monthly bank statement as a regular payment.
  3. Bank transfer. PayPal have accounts in local banks in a number of countries around the globe. This means that you can put money into your PayPal account with a domestic bank to bank (giro) transfer. However, unlike the options where you use some debit or credit card to fund your purchase, bank transfer is not instantaneous. If you want to use this option, you must keep suffiscient funds in your PayPal account in order to pay merchants immedately after a purchase.

I strongly recommend that when paying through PayPal, you use a credit card instead of the two other methods.

Here's why: When you do a bank transfer, or you use a debit card, the transfer of money from you to PayPal takes place long before you've received whatever goods you've bought. If you receive broken or substandard merchandise, and the seller declines your request for a refund, you have to convince PayPal that you have the right to have your money refunded.

When you use a credit card, the amount charged is added to the credit card bill. The actual payment happens when you pay your monthly credit card bill. Since there is a 30 day line of credit associated with a credit card, payment will happen after you have received the item from the merchant and have had the opportunity to examine it. If the seller has not delivered on his promises you only have to tell your credit card company that you dispute the charge. Now, to receive the payment, PayPal and the merchant have to convince the credit card company that the merchandise has been delivered as promised and that the charge is legitimate.

The important difference between paying by credit card and paying by the other two methods is who has the burden of proof if a dispute arises. From the buyer's perspective, it is far more convenient that it is PayPal and the merchant that has this burden of proof, than that it is the buyer who have it.

3. Verified accounts

If at you look at the status line of your newly created PayPal account, it says “Status: Unverified”. followed by a link with the text “Get verified”. The exact steps you need to go through to get your PayPal account verfied depends on the region where you reside. In the USA you will need to have a confirmed a bank account linked to your PayPal account, or received approval for a PayPal Plus credit card. In most other regions, to become verifyed, you must link a credit card to your PayPal account.

Without a verified account, there is an upper limit to how much money you can send using PayPal. The actual limit varies with region. Click on the link “View Limits” on your PayPal account overview page to see what your limits are. For most users, this limit is not a problem.

However, some merchants will not sell to buyers that do not have a verified PayPal account. If this becomes a problem, you may want to get your account verified.

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2 responses:

Beware of PayPal

PayPal now requires all accounts to be "verified" if you every want your dollar limit to be greater than zero. In other words, be useable. But you have to give PayPal permission to take money from your back account without telling you and then they promise to give it back. This is their plan, and if it works fine. But to your bank, your account is now a "Joint Account" with you and PayPal as equal parties. Either party can empty the account. You may trust PayPal, but if (or rather when) they get hacked, all your bank money may be taken without the bank knowing anything is wrong, because you agreed to this beforehand. DO NOT get into such an agreement! Tell PayPal they can access your credit card only and NOT your bank account!

Incorrect statement

This is incorrect "However, some merchants will not sell to buyers that does not have an unverified PayPal account. If this becomes a problem, you may want to get your account verified"

Is should read "However, some merchants will not sell to buyers that do not have a verified PayPal account. If this becomes a problem, you may want to get your account verified"

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