How Does Paypal Work?

Many people are not aware about the importance of Paypal in the global monetary transactions. They think that Paypal is just another online payment system and the merchant ca disappear with the money once it is paid online. But in reality, Paypal works in the best interest of both the buyer and the merchant.

Here are some salient features of Paypal - 

• The merchant is required to link his/her bank account with the Paypal account.
• In a country like India, where all financial transactions are recorded in the people's PAN card, the merchant is required to link his/her PAN card with the Paypal account. 
• This means that all transactions made on the Paypal account are available with the authorities along with the bank details and contacts of the merchant.
• Paypal has all details of the transactions made in its accounts, which can be reproduced whenever demanded. This can't be deleted.
• The merchant and the buyer can't see each other's bank and credit details at any point of time.
• In case of any discrepancy, the buyer can complain to Paypal. On receiving the complain, the merchant is given 14 days to clarify. If s/he fails to clarify, Paypal reverts the money back to the buyer.
• Similarly, if the buyer lodges a false complain, the merchant is asked to clarify. If the merchant can clarify with evidence in 14 days, the complaint is rejcted by Paypal.
• Thus, you can see that Paypal is a secure mode of payment and the merchant can't disappear after taking the money. In fact, it is more secure than cheque payment, in which case of the merchant disappears with the cheque, it is problematic to track his/her whereabouts.

Please see the images above to understand how Paypal works and below to see the transaction details in a Paypal account.