How does PayPal make money? How it works

With PayPal you have the possibility to pay securely in online stores without giving out your bank details. To use the payment method, you just need to create a free account and verify an account. In addition, it is necessary that the corresponding store supports the payment method.

How PayPal earns money

If you don't want to provide your bank details when shopping in an online store, a payment method like PayPal is a good choice. To use the method, you need to create a free account and have a bank account verified. Moreover, it is necessary that the online store offers PayPal as a payment method. Since the service is completely free for you, the question usually arises how PayPal earns its money with it.

1. PayPal is completely free for you as a buyer. The recipient of the money, on the other hand, must pay a fee for the transaction. Here, the amount to be paid depends on the amount of money that the recipient receives.
2. The payment service provider PayPal therefore earns the money with these fees, which largely makes up the turnover. Therefore, if a store offers the payment method, it must also pay the fees. Customers trust a store usually rather, if this PayPal offers.
3. In 2014, there were already 179 million active users registered with PayPal, since then the number has increased again by numerous people.
4. In 2015, the company wrote a turnover of 9.2 billion US dollars. In 2017, the profit was even 380 million US dollars.