Free Guide to Sending Money With PayPal
Understanding PayPal Money Transfer Basics
PayPal is a digital payment platform that lets people send money to others online. The service operates in more than 200 countries and territories, making it one of the world's largest money transfer networks. According to PayPal's 2023 financial reports, the platform processed over $936 billion in total payment volume, demonstrating its widespread use for personal and business transactions.
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Money transfers through PayPal work by linking your bank account, debit card, or credit card to your PayPal account. When you send money, PayPal acts as an intermediary, moving funds from your linked payment method to the recipient's account. The recipient can then withdraw the money to their own bank account or keep it in their PayPal wallet for future purchases.
PayPal offers different ways to send money depending on your relationship with the recipient and how quickly you need the transfer completed. Sending money to friends and family typically costs nothing when using your bank account or PayPal balance. Business payments and international transfers may involve fees. The time it takes for money to arrive ranges from instant transfers to several business days, depending on the method you select.
Understanding these basics is important because choosing the right transfer method can save you money and time. Different scenarios call for different approaches—sending $20 to a friend locally differs significantly from sending $500 internationally to a relative abroad.
Practical takeaway: Before sending money through PayPal, determine whether you're making a personal or business payment and whether it's domestic or international, as these factors affect costs and delivery time.
Setting Up Your PayPal Account for Money Transfers
Creating a PayPal account is the first step toward sending money. Visit PayPal.com and click the sign-up option. You'll need to provide basic information including your name, email address, password, and date of birth. PayPal requires you to be at least 18 years old to have an account. The entire account creation process typically takes less than five minutes.
PayPal offers two main account types: Personal and Business. A Personal account is designed for individual money transfers and shopping. A Business account is intended for people who sell goods or services and need invoicing tools. Both account types can send money to others, but Business accounts have additional features like bulk payment capabilities and reporting tools. For most people sending money to friends and family, a Personal account is sufficient.
After creating your account, you need to add at least one payment method. This is how PayPal knows where to pull money from when you send a transfer. You can link:
- Your bank account (checking or savings)
- A debit card
- A credit card
- A PayPal balance (money already in your account)
Adding a bank account requires you to verify that you own it. PayPal typically deposits two small amounts (usually under $1 each) into your bank account, then asks you to enter those amounts to confirm ownership. This process takes one to two business days. Debit and credit cards are verified differently—you may need to confirm a small charge or provide your card's CVV code.
PayPal will ask you to verify your identity during setup or your first transaction. This involves confirming your name matches your legal documents and sometimes providing additional information. This security measure protects both you and recipients from fraud.
Practical takeaway: Link your bank account rather than a credit card when possible, as transferring from a bank account to send money to friends and family is free, whereas credit card transfers may incur fees.
Step-by-Step Process for Sending Money
Once your PayPal account is set up and verified, sending money involves a straightforward process. Log into your PayPal account and look for the "Send Money" button, which appears prominently on the homepage. Click this button to begin the transfer process.
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The next screen asks you to identify the recipient. You can send money to someone using:
- Their email address
- Their phone number
- Their PayPal username (if they have one)
Enter the recipient's information carefully. A single digit error in an email address or phone number will send money to the wrong person. Once you've entered the recipient details, PayPal will ask how much money you want to send. Type in the amount—you can send as little as $0.01 or amounts in the thousands, though your account may have limits based on your verification status and transaction history.
Next, you'll select how you're sending the money. PayPal asks whether this is a personal transfer (to a friend or family member) or a payment for goods or services. Personal transfers are generally free when sent from your bank account or PayPal balance. Payments for goods or services may be subject to fees that PayPal clearly shows before you confirm.
You'll then choose your payment method from the options you've linked to your account. Select "Bank Account" or "PayPal Balance" for free personal transfers. Finally, review all details on the confirmation screen. Check that the recipient's information, amount, and payment method are correct. PayPal shows the recipient's name at this point, allowing you to verify you're sending to the right person. Click "Send Now" to complete the transfer.
After sending, PayPal displays a confirmation number. Keep this for your records. The recipient will receive a notification about the incoming payment, and the money will appear in their account according to the timeframe you selected.
Practical takeaway: Double-check the recipient's contact information before confirming any transfer, as sending money to the wrong email or phone number could result in sending funds to an unintended person.
Fees, Limits, and Costs to Know
PayPal's fee structure depends on the type of transfer you're making. Personal transfers between friends and family members within the same country are free when you send from your bank account or PayPal balance. This is the most economical way to move money to people you know.
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However, fees do apply in these situations:
- Sending money internationally: PayPal charges a percentage of the transfer amount (typically 1% to 3%) plus a flat fee ($0.30 to $2.00 depending on the country)
- Paying for goods or services: PayPal charges 2.2% of the amount plus $0.30
- Sending money with a credit card: A 2.2% fee applies
- Using PayPal's instant transfer to your debit card: Fees range from $0.25 to $1.50 depending on speed
- Currency conversion: If you're sending money internationally in a different currency, PayPal applies an exchange rate with a markup
PayPal also sets transaction limits that vary based on your account age and verification status. New, unverified accounts typically can send and receive $500 to $2,000 per month. As you build your account history and complete verification steps, these limits increase. Some users with long account histories and consistent activity may send tens of thousands of dollars monthly. Your specific limit appears in your account settings under "Limits and Holds."
Additionally, PayPal places temporary holds on certain transactions as a security measure. If you're sending a large amount to a new recipient or transferring money to a different country for the first time, PayPal may hold the funds for a few days while reviewing the transaction. This protects against fraud but can delay when the recipient receives money.
Understanding these costs and limits beforehand prevents surprises. A $100 international transfer might only net the recipient $96 after fees. Knowing your account's transfer limit ensures you don't attempt to send more than allowed.
Practical takeaway: For free domestic personal transfers, use your bank account or existing PayPal balance. If you're sending internationally or paying for items, calculate the fees beforehand so you know the actual amount the recipient will get.
Security Measures and Protecting Your Account
Protecting your PayPal account is critical because it holds financial information and can authorize money transfers. PayPal uses encryption technology to secure your information when it travels across the
This guide is for general information only and is not medical, financial, legal, or other professional advice. For decisions specific to your situation, consult a qualified professional. See our Editorial Policy.