You don't need a credit card to use PayPal. As long as you have a bank account, you can set up a PayPal account without a credit card or debit card. It's helpful to understand how PayPal works and what your options are for sending and receiving money through their app.
In this article, you'll learn:
- What is PayPal?
- How do I use PayPal without a credit card?
- How do I link my bank account to PayPal?
- How do I send or receive money with PayPal?
- Is PayPal free to use?
- How can Chase customers maximize their benefits when using PayPal?
What is PayPal?
PayPal is an online payment system that allows you to make purchases online or in person, as well as send and receive money to others. It acts as the intermediary party between you and your bank.
When you link your bank account, credit card or debit card to your PayPal account, you can use PayPal to make purchases online, and those merchants will not receive your account information.
PayPal has become one of the most widely used and trusted third-party processors, currently serving almost 400 million active users worldwide.
How do I use PayPal without a credit card?
PayPal doesn't require a credit card. If it is your preference not to use a credit card, you can still take advantage of all of PayPal's features by linking to a bank account. This will allow you to do things like:
- Send money to friends or businesses: You can send money to anyone with an email address or mobile phone number.
- Request and receive money: Anyone can send you money by entering the email address or phone number you have registered with your PayPal account.
- Accept credit cards on your website: If you're a small business owner, PayPal can act as the credit card processor for your payments.
- Generate invoices: PayPal's free invoice tool lets you send a customized invoice with your logo and contact information. The recipient can click on the payment button to pay you with their PayPal account, credit card or debit card.
- Create a money pool: If you have a personal PayPal account, you can create a money pool that lets a group of people contribute to a shared expense.
- Make charitable donations: You can use your PayPal account to make contributions to nonprofit organizations that use the PayPal donate button on their websites. You can also use your account to donate to charities listed on PayPal's Giving Fund page.
- Cash checks: PayPal's check-cashing service lets you take a picture of the check you want to cash, and receive the money without a fee after 10 days. You can get your funds more quickly if you pay a fee.
How do I link my bank account to PayPal?
Once you sign up for a PayPal account, they will use your bank account number and your bank's routing number to link them together. You can find your routing number by logging into your bank account online. Submit your banking information by going to the “Wallet" section of your PayPal account and clicking “Link a Bank."
PayPal will then temporarily deposit two small amounts into your bank account. Once you receive these deposits, go back to the Wallet section account and enter the exact amounts of the deposits. If the amounts you enter match what PayPal deposited, they will link your bank account.
How do I send or receive money with PayPal?
Sending money through PayPal
You can send secure payments to almost anyone without sharing your financial information with the recipient. Log in to the PayPal app or website and do the following:
- Choose "Payments", then tap "Pay".
- Enter the recipient's name, PayPal username, email or mobile number.
- Enter the amount you want to send and tap Next.
- Choose your payment method and tap Next.
- Choose "Friends and Family" or "Goods and Services" and tap "Next".
- Confirm the details and tap "Send".
The recipient will get the payment. If you have a Verified PayPal account, you can send a maximum $60,000 from your account. You can send a one-time payment of up to $4,000 without setting up a PayPal account.
Receiving money through PayPal
There are two parts to receiving money through PayPal. The first part is when the money lands in your PayPal account. The second part is when you transfer those funds from your PayPal account to your linked bank account.
To start, make sure to provide the sender with the email address you have connected to your PayPal account. You'll receive an email alert that you've received money. Then open the PayPal app or website to transfer the funds from PayPal to your linked bank account. To do that, log in to your PayPal account and do the following:
- Tap the "Transfer Money" button.
- Tap on "Transfer to your bank".
- If you have multiple bank accounts linked to your PayPal account, choose which one you want to transfer your money to, then tap "Next".
- Enter the amount of money you want to transfer, then tap "Next".
- Confirm the details. If all the information shown is correct, tap "Transfer Now".
Your money will then be transferred from your PayPal queue to your bank account. This will take 1 to 3 business days, or you can use their Instant Transfer option for a fee.
Is PayPal free to use?
There is no cost to use PayPal for basic personal transactions, such as sending or receiving money between PayPal accounts and bank accounts within the U.S. However, there are some actions in which you may incur a fee, and they are often related to whether the transaction is personal or for business, or if you're using a credit card. Here are some fees you may incur while using PayPal:
Using a debit or credit card
There is a fee to send money to someone using a debit or credit card (instead of a bank account). In 2022, the fee is 2.9% plus a fixed amount that varies depending on the currency.
You will also encounter a fee if you're sending money to someone in another country. This fee is 5% of the amount you want to send, plus an additional international fee of $0.99 to $4.99, depending on the country.
As mentioned earlier in the article, if you're transferring funds to your bank account and cannot wait the standard 1 to 3 business days, there is a fee for instant transfers, which is 1% (up to $10), using a linked Visa debit card.
For business transactions in which PayPal is used as the payment processor, PayPal charges fees that are a percentage of the amount plus a fixed fee per transaction. Here are some examples:
- Sales transactions within the U.S. add a fee of 2.9% plus 30 cents.
- International sales transactions add a fee of 4.4% plus a fixed amount depending on the country.
- To use the PayPal Here card reader, there's an added fee of 2.7% per swipe, or 3.5% plus 15 cents for manual transactions.
- If you receive an international charity transaction, there is a fee of 1.5%, plus a fixed amount depending on the country.
- This is not a comprehensive list. Be sure to read PayPal's full fee summary on their website.
Use Chase and PayPal together
You can combine the power and benefits of both Chase and PayPal. You can link your Chase account to PayPal— plus, eligible customers can even use Chase Ultimate Rewards® points when you checkout through PayPal.
If you don't feel comfortable using a credit card to make online purchases, you may find that PayPal offers payment flexibility and added privacy. However, there are some advantages to linking a credit card to your PayPal account, especially if you have a rewards card that earns points for using the platform. Either way, it's an easy way to send and receive money.