Different Ways to Pay through PayPal
In order to pay someone from your PayPal account, you have to get the money into your PayPal account. You have several ways to fund the money you send to another party through PayPal, including instant transfer, eCheck, PayPal balance, and credit card. Here’s a quick overview:
Instant transfer: Sending money this way means the money is immediately credited to the recipient’s account. That person can then transfer the money to his or her personal bank account without delay. If you want to send a transfer, you must have a credit or debit card registered with PayPal as a backup for your funds — just in case your bank denies the transfer. It’s just like writing a secure check — without exposing any of your personal information (such as your checking-account number) to another party.
eCheck: Sending an eCheck isn’t as “instant” as an instant transfer. Just like writing a check from your checking account, it can take up to four days for the eCheck to clear. You do not need a backup source of funds when you use eCheck.
PayPal balance: If someone sent you money through PayPal or you’ve sold something on eBay (and your buyer has paid you through PayPal), you have a balance in your PayPal account. This balance is applied to any purchases you’ve made first. Then, when your account has no balance, you can choose to pay by credit card. It’s simplest to keep your books balanced if you withdraw any PayPal balance to your business checking account before you make a purchase.
Credit card: Charge it! Putting your PayPal purchases on a credit card is a good idea. Not only are you protected by PayPal, but your credit-card company also backs you up in case of fraud.
You can register multiple credit cards on your PayPal account and select a different one for different types of purchases. That way, you can place personal purchases on one account and business purchases on another. It makes end-of-year bookkeeping a lot easier!