It is its own thing and money stays there. For example, I sell stuff on eBay and the money goes to PayPal. If I want to pay for something using PayPal, when I make a payment the money is taken out of my PayPal total. If I don’t have enough money in my PayPal account - say the thing I am buying using PayPal is $20 and I have a PayPal balance of $10 - it will take some money out of my PayPal account ($10, all I have left) and the rest ($10) out of my bank account. Bank account is default - I could also choose for the amount to be taken out against my credit card on file.
Some people do not trust PayPal to hold their money (it’s not FDIC insured and it doesn’t pay interest) and if they get money in their PayPal account (say from selling stuff on eBay) they immediately transfer it to their bank account. Then, if they make a purchase and pay using PayPal, the money comes out of either their bank account (by default) or their credit card on file.
If you do not have a PayPal account you can still pay for stuff when the seller is using PayPal. You just put in your credit card info like you would for any site requiring payment and it goes through like any other payment. It can’t charge your bank account since you don’t have an account with them, and using it once to process a credit card doesn’t give you an account.
Paypal is a great way to pay for certain transactions but the bank access, fees, and spreading of your information would not be worth, say, $10. Or the hassle to set up a unique bank account just to get $10 would not be worth the benefit.
My concern with Paypal isn’t that they’re “untrustworthy”, it’s that they operate on the principle of the Internet economy – i.e.- servicing enormous numbers of clients with very small revenues per client, meaning “mass market” in the extreme. Think “Microsoft” – if Windows doesn’t work for you, good luck getting in touch with an actual Microsoft engineer in Redmond or even someone half-assed competent. It’s just not a feasible business model. If I have a problem with a real bank, there are real people with actual names that I can talk to directly, an established escalation procedure, and regulatory oversight that I can appeal to. With Paypal you’re basically just a statistic. I do use Paypal very occasionally, but on the basis of “limited exposure”. I don’t have a linked bank account and if I did I’d be inclined to use a dedicated account for only that purpose.
I was going to add that but I missed the edit window. Not to overly scare the OP but your whole browser can get possessed by malware and then even search results and/or things you type in the address bar can be hijacked*!* It will be pretty apparent when stuff like this is happening though. Gotta love the internet…
Well, I tried, using the address bar technique. And I gave up.
I created an account. I expected to see something like, “Your account number is” or “Your account address is,” but nothing. Well, maybe that comes at the end.
Then I tried to enter the necessary financial information. Nope, it didn’t like my bank information. My credit card information was okay, but the verification text that was to be sent to my cellphone never arrived. Between its dislike of my banking information and the non-arriving text, I got spooked and closed the whole thing down. I’m going to watch my credit card and bank account closely over the next while, that’s for sure.
What should happen when setting up a PayPal account?