You must have been living in a cave for years if you haven’t heard of the giant internet gorilla known as paypal.

Here is a basic primer.

Paypal is sort of like on online banking service. It interfaces your REAL financial accounts (banks & credit cards) with all the major internet merchants. You can also very easily receive or send money to anyone with a paypal account. It’s easy as typing their email address and then typing how much you want to send.

How does Paypal make money? Well, sending money is free. But they charge you a small fee percentage any time you receive any kind of money.

I regard Paypal as a necessary evil. Paypal is an intermediary that builds trust among random strangers on the internet. It is absolutely necessary if you do any major buying or selling on the internet. For example, you will get nowhere on Ebay without a Paypal account. There are many additional online marketplaces on which no one will trust you without a paypal account.

What’s wrong with Paypal? Oh, don’t get me started. There are entire websites devoted to the evil that is Paypal. The problem with Paypal is that it is a monopoly. Consumer rights can sometimes be neglected when you have a monopoly. To take full advantage of paypal, you need to link your bank accounts and credit cards to it. This means Paypal could potentially take any money it wants from these accounts.

Yes, very scary.

I’ve used Paypal for years now (tens of thousands of dollars) and have never had any issues. In fact, they have been very helpful with several internet transactions where people were trying to scam me. I ended up getting all my money back very easily in all cases.

For me, the advantages far outweigh any of the disadvantages. Yes, I’ve heard the horror stories. But I think as long you follow the rules and are aware of where the gray areas are in Paypal’s policies you’ll be okay.

So weigh the pros and cons. If you think it is worth it, sign up for a paypal account.

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