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PayPal, a business owned by Ebay, has attracted millions upon millions of users. A great deal of them have learned the hard way: it functions under different rules than banks. Some of the differences are beneficial. Others disappoint and infuriate users.

Pros:

+ PayPal is a secure way to spend, transfer, and receive money online. It hides buyers' bank account information, making identity theft less probable.

+ The website's services are free to use, with the exceptions of 2.9% per sale and .30 per transaction.

+ Certain websites only pay through PayPal, so opening an account will allow one the ability to take advantage of them.

+ The growing network consists of over 100 countries.

+ PayPal is the safest and easiest option for e-bay merchants.

+ It only takes four days to verify one's bank account.

Cons

-Users are only permitted five withdrawals annually, and payments may take up to a week to arrive.

-If PayPal notes any suspicious activity, one's account may get frozen. Funds can be confiscated for up to six months! For instance, if somebody purchases an item with a stolen credit card, the seller's account will be flagged.

-PayPal will stop at nothing to protect its users from fraud. Unfortunately, this is often at the expense of innocent sellers.

-Reasons for frozen accounts/funds:
*A computer with a dirty past is used to log on. Users should only log on using personal computers.
*Two accounts look too similar
*Phishing is involved
*Wrong username or password

-To make matters worst, PayPal's customer service is often deplorable. Representatives are difficult to get a hold of and slow to resolve major issues.

-PayPal is uninsured. If one's money mysteriously disappears, the business will not be held accountable.

-Their chargeback policy favors buyers and creates difficulties for merchants. Chargebacks occur when an unauthorized card is used to make a purchase, and also when items are damaged or different than described by the seller.

-PayPal users are common scam targets. Users should only log on to the site using the URL, never an e-mail link. Falling for authentic looking e-mail scams is a surefire way to become a victim of identity theft.

Joining PayPal is free and simple, but in numerous ways, it's also risky. Members must be willing to accept those risks to benefit from its services. Over one hundred million have so far, and that number is only going to grow in the years to come.

Learn more about this author, Shannon Beineke.
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