How does PayPal work for personal users in the UK?

Gert Svaiko

Using PayPal for the first time? Perhaps someone wants to send you money using the online payment platform, or you want to start using PayPal at checkout when shopping online. Whichever is the case, we’re here to help.

Read on for a crash course in how PayPal works for personal users in the UK. This is different to how it works for businesses and online sellers. But you’ll be relieved to know that it’s much simpler.

We’ll cover how to send and receive money, along with other products such as PayPal Friends and Family, PayPal Credit and PayPal Pay in 3. You’ll be using it like a pro in no time.

But remember that PayPal isn’t the only way to send money, and it may not be the cheapest for payments in other currencies. So if you want to shop internationally or send money abroad, you could save with a Wise account. It only charges low fees and always gives you a fair exchange rate.

Learn more about the Wise account

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

How does PayPal work - an overview

PayPal is an online payment platform. In a nutshell, it facilitates payments between you and your bank.

You connect a payment method such as your bank account or debit card to your PayPal account. Then when it comes to the checkout on a retail website, or sending a digital payment to someone, PayPal processes the transaction using your linked payment details

The main benefit of this is that you don’t need to enter your card or bank details every time.

You can also hold a PayPal balance. You can top it up from your linked bank account, or withdraw any money you hold in there. For example, if you receive a refund from a retailer into your PayPal balance.

Everything is done online, by logging into your PayPal account. There’s also a PayPal mobile app.

How does PayPal work with a debit card?

You can link a debit card to your PayPal account, as well as a bank account. You can then set this as your preferred payment method. This is what PayPal will automatically use when you pay for something.

It’s worth noting though that you can’t add money to your PayPal account from your debit card. For this, you’ll need to use your linked bank account.

But the beauty of PayPal is that you don’t need to top up your account before spending. By linking your debit card, PayPal will automatically use this whenever you shop or send money.

How does PayPal work with and without a bank account?

To use PayPal, you will need to add a payment method. However, this doesn’t necessarily need to be a bank account.

You can use PayPal with just a linked debit or credit card. You can use this to fund your payments, whether it’s online shopping or sending money to a friend.

But there are some things you can’t do without linking your bank account to PayPal. This includes withdrawing money from PayPal, and topping up your balance should you wish to.

What are PayPal’s products for personal users in the UK?

PayPal offers a number of services for UK personal users. This includes:

  • Online money transfers, including Request Money feature
  • Buy and shop online - pay with PayPal at the checkout
  • PayPal Friends and Family
  • PayPal.Me
  • PayPal Pay in 3
  • PayPal Credit.

We’ll give you the lowdown on these products below.

How does PayPal work when sending and receiving money?

It’s really easy to pay someone on PayPal in the UK. You simply need to login to your account, then follow these steps

  1. Click on ‘Send and Request’ at the top of the page
  2. Enter the name of the person you want to pay. You can also enter their email address, PayPal username or just their mobile number.
  3. Enter the amount you want to send and the currency
  4. Add an optional note if you like (for example, to say what the money is for)
  5. Check the information you’ve entered. When you’re happy, click ‘Send Payment Now’.

It doesn’t take long for PayPal to send money - in fact, many payments arrive instantly.

To receive money on PayPal, you can use the ‘Request money’ feature, under ‘Send and Request’ in your PayPal account.

Here, you can enter the name, email address or mobile number of the person you’d like to request money from, and the amount. The person will receive a notification to pay.

If you're looking to compare rates for sending money with another provider, consider checking out Wise.

Learn more about the Wise International money transfers

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

PayPal Friends and Family (Sending to a friend)

The PayPal Friends and Family feature works by letting you send and receive money from people you know without any fees.² This is different to making business or commercial transactions, where fees are involved.

It’s worth bearing in mind though that the fee-free benefits don't apply to any transactions where a currency conversion is involved.²

How does PayPal.Me work?

PayPal.Me is designed to make it easy to get paid. You create a PayPal.Me profile, which mainly involves creating a personalised link. It’ll look like this: PayPal.Me/ Your Name.

You can send this link to someone in order to get paid (for example, if a friend owes you money for splitting a recent restaurant bill). They simply need to click the link to pay.

PayPal Pay in 3

One of the platform’s newest products is PayPal Pay in 3. It’s designed for online shopping, letting you split your purchase into three interest-free payments.

It’s a form of credit, but PayPal says there are no fees or charges - you’ll just need to make sure you repay on time.³

Find out more about how PayPal Pay in 3 works.

PayPal Credit

PayPal Credit works by adding a credit limit to your account. So it’s like having a credit card, but without the plastic. It’s designed for spreading the cost of large online purchases, with a 0% interest offer for 4 months when you spend over £99.⁴

How does PayPal work when buying online?

It’s easy to use PayPal when online shopping. Simply add products to your cart as usual, then head to the checkout when you’re ready.

If PayPal is accepted by the retailer, it’ll be displayed as one of the payment methods alongside debit and credit cards. Select it, then a separate window will pop up for you to sign into your PayPal account.

Then you can check out as normal, with PayPal using your preferred payment method to pay for the purchase.

Can you get a refund with PayPal?

One of the benefits of shopping online with PayPal is that it provides you with extra consumer protections.

If something’s wrong with your purchase (such as damage or faults), you can open a dispute through PayPal and they’ll help you to get a refund if you’re entitled to one. Find out more about how PayPal refunds work.

And that’s it - everything you need to know about how PayPal works in the UK. Once you’ve got your account set up and a payment method linked, it should be plain sailing. You can then use PayPal for shopping online, sending money and getting paid.

Just be careful when using PayPal for international or multi-currency transactions, as there are fees involved – you can use this handy PayPal fee calculator to learn about these fees.

Sending money with Wise could be a better option, as it offers low, transparent fees and mid-market exchange rates.

Sending GBP to EUR and what it costs

Please see the Terms of Use for your region or visit Wise fees & pricing for the most up-to-date information on pricing and fees.

Sources used:

  1. PayPal - Help - How do I send money?
  2. PayPal - PayPal fees
  3. PayPal - PayPal Pay in 3
  4. PayPal - PayPal Virtual Credit

Sources last checked on date: 26-May-2023

*Please see terms of use and product availability for your region or visit Wise fees and pricing for the most up to date pricing and fee information.

This publication is provided for general information purposes and does not constitute legal, tax or other professional advice from Wise Payments Limited or its subsidiaries and its affiliates, and it is not intended as a substitute for obtaining advice from a financial advisor or any other professional.

We make no representations, warranties or guarantees, whether expressed or implied, that the content in the publication is accurate, complete or up to date.

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