Can You Overdraft PayPal?

What is PayPal?

PayPal is a multinational monetary company that supports online payment, transfer and receiving of money via a secured online account. Can you overdraft PayPal? This is one of the vastly asked questions about PayPal. In this article, you will understand if you can overdraft PayPal or not.

Can you overdraft PayPal?

PayPal is one of the widely believed and safe methods of making payments online. PayPal is a financial technology(FinTech) company that permits its users to easily process money exchange and make payments online. The company has been in existence for over 20years and is fully functional in more than 190 countries with over 360 million active users worldwide. In a financial system, an overdraft is seen as a loan provided by a financial company, this could be as a result of an amount you temporarily accessed and owe your monetary institution. 

In a lean man’s understanding, an overdraft is when you have access to more money than your balance, this might lead to one account reading a negative figure as a result of accessing more funds than you have in your account. To overdraft PayPal, means to withdraw more than what you have in your PayPal balance. For example, to pay for a product worth $70 when you only have $60 as your balance. PayPal is not a bank and it wasn’t designed to operate as a bank, hence cannot be overdrafted. PayPal does not allow its user to continue processing payments when the account has no funds in it, rather, they use a backup funding option that allows users to provide funding source(s)

• linking your bank account to your PayPal so that whenever your PayPal funds aren’t sufficient and you require to make a transaction, your bank can stand as a backup funding option.

• Access to a Paypal credit: A credit card is like a virtual card that can be used online to make payment. When you have your PayPal balance is insufficient, your transactions will not be processed.  PayPal however attempts to use your backup source to process the transaction. You should have sufficient funds in your backup source to process your transaction. However, a negative balance may be incurred in your PayPal when they are reversed in your transaction as a result of a lost transaction or having an insufficient amount in your bank account. You must rectify this negative balance; there is a way it can be rectified 

• By funding your PayPal account to resolve the negative balance. 

Below are step in which you can rectify your PayPal account

1. Login to your account
2. Click on wallet
3. Click on add money and select your preferred option to find your wallet
4. Click on continue and follow the given instruction

• A negative account can also be rectified by receiving money directly to your PayPal account

Will PayPal withdraw from my account to rectify a negative balance?

Note that PayPal will not attempt to withdraw from your bank account to rectify your Negative balance, it is left for you to choose how it can be rectified, either by funding your PayPal wallet or by sending money directly to your PayPal account. PayPal gives its user a period of 100days or more to rectify these issues after which your account will be blocked if not rectified within the stipulated days.

Is PayPal free?

Having a PayPal account is free, there is no charge for creating a PayPal account or making transactions using PayPal. However, before you create a PayPal account you have to choose if it is for personal or business use.

• The personal PayPal account is for individual use. To make online payments, receive or send money 

• The business PayPal account is for business purposes. To allow businesses to accept PayPal payments online.

How does PayPal operate?

PayPal is a go-between you and a bank. All the transactions(online payments, receiving and sending of money, currency conversion ) are done by PayPal. PayPal allows its users to link their bank account or card to Paypal by linking your bank/credit or debit card, it also gives you the option to choose which bank or card to use in your transaction

How to open a PayPal account?

 To open a PayPal account there are a few steps to take

1. Search for PayPal in a browser and click on signup. You can, however, download the PayPal app on your PlayStore or Appstore 
2. Choose which account you will like to open either the personal account or the business account.
3. Provide the necessary details required
4. Add your bank account or credit card to your PayPal, this is optional.
5. Check your email for account verification

Creating a PayPal account is quite simple and self-explanatory.

Advantages of having a Paypal account

1. It is safe and easy for making online monetary transactions
2. It provides support to the business owner who makes use of PayPal 
3. PayPal is a payment solution 
4. PayPal enables you to make financial transactions using your bank account instead of a card 
5. PayPal keeps your information always from your merchant

Disadvantages of using PayPal. 

There are some disadvantages to using PayPal for exchange. 

• Using PayPal involves high fees for chargebacks. This fee shows no sign of helping small businesses grow as PayPal portrays. 

• You have usage limits by their terms and one’s account can be subjected to suspension at any time without warning which can result in frozen funds for months. However, reaching their customer service care can be so hard. 

• Some potential clients do not make use of PayPal for exchange and this may result in lost business.

FAQs

• Will I be charged when I receive money to my PayPal account?

 When you receive or send money to your PayPal account for personal purposes that are not in any way a commercial or business transaction. Such a transaction attracts charges. But no charge when used to make payments online.

• Can one transfer funds from PayPal to my local bank?

Yes, PayPal allows transfer of funds from their PayPal account to their linked local bank. There are no charge fees so long your account is connected with your PayPal.