Peer-to-peer (P2P) payments have become integral to how people exchange money digitally in the modern era. With over 426 million active individual and business accounts worldwide, PayPal stands tall as a pioneer in transforming digital payments at scale.
Whether you want to pay back a friend, split bills for your next trip, donate to a cause or make online purchases without whipping out your credit card, PayPal makes sending and receiving money a breeze.
But how exactly do you send money via PayPal? That‘s what we‘ll explore in this step-by-step guide!
I‘ve been an avid PayPal user and payments industry analyst for over 15 years. So I‘ll share plenty of tips, security best practices and even limitations that first-timers should keep in mind based on my experience.
Let‘s start by understanding why PayPal has become such a ubiquitous payments platform globally since its launch over two decades ago.
The Evolution of PayPal as a P2P Payments Leader
PayPal as we know it today really began taking shape around 2002. That‘s when eBay allowed buyers and sellers to use PayPal to transact – triggering exponential growth. In under two years, PayPal‘s total payment volume catapulted from $6.9 Billion in Q4 2002 to over $24 Billion by Q3 2004!
The ingenious aspect was letting users link PayPal to their bank account or cards. This allowed fast online payments WITHOUT exposing your actual banking or credit card information to merchants.
As mobile took off, PayPal also quickly adapted. Today, around 50% of PayPal‘s $1.2 Trillion in total 2021 payment volume originates on mobile devices. I‘ve loved the convenience of PayPal‘s mobile app for checking balances or sending payments on-the-go.
For me, what sets PayPal apart is security, ease-of-use and speed. But PayPal also lets you buy, sell and hold cryptocurrency – which points to its future roadmap around digital assets and blockchain technology.
Okay, now that you know why PayPal matters, let‘s walk through the steps to send money quickly.
Step 1: Log In to Your PayPal Account
First, you need access. If on desktop, head to paypal.com and click Log In. Prefer mobile? Download the PayPal app on your Android or iOS phone.
I prefer the app since 2005 because it‘s fast to:
- Check balances
- Send/receive funds
- Track payments
Simply log into your account using your verified email and password. PayPal will also prompt you for two-factor authentication periodically as an added security measure.
Once signed in, you‘ll see key account areas like:
- Balance: Funds available to send or withdraw
- Recent Activity: Past transactions
- Payment Methods: Bank account or card(s) linked
Familiarize yourself with the main app dashboard. This is your launchpad to send payments!
Step 2: Tap "Send"
Ready to send money to anyone in seconds? Near the top, tap the blue “Send” icon to initiate transferring funds. This opens up payment flows.
You can also select “Send” from the menu at the bottom.
As per PayPal‘s latest filings, P2P payments account for 15% of transaction volume. The Send icon makes it straightforward for PayPal‘s core base of over 400 million users.
Now comes choosing the lucky recipient of your hard-earned money…
Step 3: Select Recipient
Assuming they already have a PayPal account, start typing your recipient’s name or email address in the “To” field.
As you type, PayPal will auto-populate suggested contacts:
You can keep scrolling and add names manually as well. Even if someone hasn‘t signed up for PayPal yet, entering their email lets them claim funds.
Ideally though, send money to verified recipients for faster transfers.
For in-person payments, use the QR code to identify recipients quickly instead of typing details.
Finally, don‘t forget to add a note so your friend knows what the payment is for!
With your recipient chosen, hit "Next".
Step 4: Enter Payment Amount
Now specify how much money you want to send to your selected recipient.
PayPal allows specifying:
- Exact amount: Enter $20.50 etc
- Common amounts: Quickly choose $20
- Request money: Ask recipient to pay you back!
I typically use the exact amount field. PayPal also lets you split payments between different funding sources, which is handy.
You can also add an emoji or gif to make it more personal! When done entering details, review and tap “Next”. We’re almost there.
Step 5: Select Payment Type
This step is important as it impacts transaction fees and buyer/seller protection.
PayPal lets you send money using two types:
| Payment Type | Best For | Fee | Protection |
|---|---|---|---|
| Friends and Family | Personal payments for gifting, splitting bills etc. | None | None |
| Goods and Services | Online purchases and professional service payments | Yes (~3%) | Yes |
So based on the scenario, choose wisely:
I always use Friends & Family for personal transfers whenever possible to avoid fees.
However, for buying goods/services, choose Goods & Services for payment protection even if it means higher fees. PayPal allows raising disputes within 180 days if issues arise.
Review your choice and hit “Next”.
Step 6: Send Money
At last, we’ve reached the final step of previewing and actually sending money via PayPal!
First, review all transaction details:
- Recipient name
- Transfer amount
- Payment source
Carefully verify everything INCLUDING recipient details along with transfer amount. PayPal does allow sending complaints, but resolving errors after sending payments becomes complicated.
If you used your PayPal balance as the source:
- Payments happen instantly for most cases
- Except bank verification for first-time recipients, delaying funds clearance for up to 21 days
Finally, tap the big blue “Send Money” button with confidence!
And…that‘s it! By following those six simple steps you can securely send money to virtually anyone using PayPal.
Boom! Your payment will reach recipients within seconds. They‘ll get notified via email/text that they received funds into their PayPal account.
Next let‘s talk about two popular questions around PayPal transfers…
Can You Send Money Anonymously via PayPal?
The one downside of PayPal from a privacy perspective is that your name and details are visible with every payment sent/received.
I tested workarounds like fake accounts earlier on but had no luck. PayPal‘s ID verification rules have only gotten stricter over time.
However, here‘s what still gives you some privacy:
Business accounts display your company name by default for payments. It keeps personal name/address details private.
Of course this only helps if you‘re running a business or side-gig monetized via PayPal checkout. For personal transfers, full transparency on identity remains table stakes.
Sending Cryptocurrency via PayPal
PayPal now also lets you buy, sell, hold and pay with popular cryptocurrencies!
As of 2022, supported digital currencies are:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
To send crypto via PayPal:
-
Tap the Crypto tab and select token i.e. BTC
-
Choose amount to send
-
Provide recipient‘s PayPal wallet address
-
Send!
Make sure to only send BTC to a BTC wallet address though. Sending Bitcoin Cash to an Ethereum address will result in losing your money!
Tips for Seamless Money Transfers
Here are some handy best practices worth keeping in mind:
Avoid Fees for Personal Transfers
Always try using Friends & Family option when possible. But remember it lacks fraud protection.
Double Check Recipient Details
Confirm ALL details before hitting send! Typos when adding recipients often leads to incorrect transfers. I can‘t stress this enough.
Link Bank Account for Faster Funding
Linking a bank account and adding balance helps reduce friction and fees associated with card payments.
Beware Currency Conversion Rates
Don‘t get stung sending international payments. PayPal‘s foreign exchange rates can be unpredictable vs banks.
And here are typical trouble areas that can come up:
| Issue | Solution | Prevention |
|---|---|---|
| Fake payment email receipt | Contact PayPal support to trace actual transaction | Beware phishing attempts asking for bank pins, passwords etc. |
| Wrong recipient | Ask recipient to send funds back to you if honest mistake | Always triple check name spelling and exact email address/mobile |
| Disputes about goods/services | Use Goods & Services payment option for buyer/seller protection via PayPal | Avoid Friends payments unless trusted recipient |
Having used PayPal since the early 2000s, I‘ve learned quite some lessons myself through trial-and-error! Hopefully these tips help you avoid common hiccups.
The Last Word
While challengers like Venmo, CashApp and even cryptocurrencies are emerging, PayPal remains the entrenched leader when you need to send money online conveniently.
PayPal‘s trust and security makes it ideal to pay friends who forgot their wallets, purchase goods securely online or simply reimburse expenses towards shared trips or events.
At the heart of it, PayPal created a virtual wallet for the digital age that uses email/mobile numbers to send money instantly from device to device without relying on bank names, branch details or account numbers.
It really simplified personal payments digitally – whether across towns or across borders. No wonder it has grown to over 400 million active accounts that send around $1.2 Trillion in payments annually.
So in this guide, we covered everything – from logging in to selecting recipients to choosing transfer amounts and sending money instantly via PayPal in just 6 steps. While not without some limitations, learning how to effectively use PayPal gives you an accessible and secure way of making P2P payments online.
Go ahead, use the steps here to send some money to family and friends today and see for yourself! Did you find this guide useful? Let me know any other topics around digital wallets and online payments you’d need a primer on.
