PayPal (not PayPall) is an online payment processor that serves as a middleperson between a merchant and a buyer. In order to use this payment scheme, both merchant and buyer must have a PayPal account. The buyer-merchant exchange of funds takes place between these two accounts.

The first time I learned about PayPal, I was wondering, why do we need a middleperson for this situation? As a buyer, why should I not simply ask the vendor his bank account information and transfer the payments directly to his/her account? I can do it online as well since banks have e-banking services. I can possibly make a bank-to-bank transfer, a wire transfer, or any other e-banking method available at my disposal.

The Internet is full of scammers, swindlers, defrauders, and all sorts of con artists. Giving out your bank account information to every buyer and merchant you encounter on the Internet is definitely not a good idea. Bank account information is a gold mine for scammers.

PayPal does not only facilitate worldwide e-commerce through its services but at the same time makes online financial transactions safer because you do not need to share your bank information to everyone that you transact with.

As I stated earlier, both the buyer and the merchant must have their own PayPal accounts in order to exchange any fund through PayPal.

Although I am using the buyer-merchant relationship in explaining PayPal, this discussion essentially applies to any two financial entities not necessarily in a buyer-merchant relationship. PayPal can be used to transfer money to your relatives and friends for whatever purposes and intentions. It is also being extensively used for sending and receiving donations on the Internet.

PayPal itself says that you can send or ask someone for money through PayPal even though he or she does not have a corresponding PayPal account. PayPal provides a tool for e-mailing the link that bring him or her to a page to enter his credit card information. This method is actually and in reality creating a new PayPal account. Only after the account has been created that money transfer can be made.

This is how PayPal works and its very simple.  First, you have to sign up and create your account by providing the necessary details like name, address, e-mail address, etc.  Once you have created your account, you have to fund it.  This can be funded through a credit card, a wire transfer from your bank, or through a check.  And then, you're ready to start sending or receiving funds via PayPal.

Money can be transferred in different methods not only thru cash, checks and credit cards. Find out more about these other methods here.

If it is still unclear to you if you want to use PayPal or not, try reading, What you should know about PayPal.

Are you confused about Google Adsense and PayPal? Someone in HubPages tried to explain the difference between the two. Take a look at Diferrence between Google Adsense and PayPal.

So, you have a blog site or a paysite website and you're thinking of integrating PayPal into it. Read the following informative and step by step guide. PayPal Sandbox is the place where you test your website's PayPal e-commerce interface using simulated actual transactions (money transfers) without affecting your real and actual PayPal account.

• How to Create a PayPal Buy Now Button in PayPal Sandbox, Part 1
• How to Create a PayPal Buy Now Button In PayPal Sandbox, Part 2
• Learn to Create a Paypal Donate Button and Help your Charity Organization

Paysite websites sometimes use other payment processors besides PayPal. Other options for Online Payment Processors are AlertPay, MoneyBookers, e-Gold, just to mention a few of them.

• PayPal opens up a new development strategy - At its first technology developers conference this week, PayPal, the payment processing unit of eBay Inc., unveiled a new growth strategy based on sharing the software code for its PayPal X global payments platform with developers and providing a new software tool kit for building mobile payments applications.
• PayPal Seeks New Ways to Use Its Payment System - By Claire Cain Miller
  PayPal, which transformed the way people pay on the Web, is about to have much bigger reach online. On Tuesday, PayPal held its first developer conference in San Francisco to officially open its platform to software developers wanting to include payments in their Web or cellphone applications. [...] - http://bits.blogs.nytimes.com/2009/11/04/paypal-seeks-new-ways-to-use-its-payment-system/?pagemode=print
• PayPal Opens Its Global Payments Platform - SAN FRANCISCO-INNOVATE 2009 (Press Release dated November 3, 2009) - PayPal today opened its global payments platform, PayPal X. The company unveiled new application programming interfaces (APIs), a new developer portal and introductory services pricing to help developers reap the financial benefits of building businesses on PayPal X...
• Developers to put PayPal payments into applications - PayPal X pushes micro-payments - By Tony Bradley - PC World - Published: 11:41 GMT, 05 November 09 - PayPal used its inaugural PayPal X Innovate 2009 conference in San Francisco to officially announce the PayPal X program to release APIs allowing developers to integrate PayPal seamlessly into third party applications...