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More than 300 million people and businesses worldwide use PayPal to send money, receive money and shop online. Along with digital payments, PayPal offers other financial services like debit cards, prepaid cards, credit cards and lines of credit. If you don’t already have a checking or savings account, you may be considering using PayPal as your everyday banking solution. After all, PayPal offers convenience and a digital-first experience. However, while PayPal offers some bank-like features, PayPal is not a bank and it doesn’t provide the same range of financial services. Depending on what you need from your banking relationship, PayPal may or may not cover all of the bases. Here’s a closer look at PayPal—and the financial products and services it offers—to help you decide whether it’s the right fit for your goals. What Is PayPal and How Does It Work?What Is PayPal?PayPal is a digital payments company available in more than 200 countries. It offers the ability to make transactions in 25 currencies. And it was one of the first companies to make it possible for people to easily and securely shop online and send money to people electronically. Although PayPal is not a bank, it partners with banks—like The Bancorp Bank and Synchrony Bank—to offer various products like debit cards, prepaid cards, credit cards and lines of credit. How Does It Work?PayPal allows you to connect an external bank account, credit card and debit card and use the service to shop online securely. It acts as an intermediary between your payment method and merchants, keeping your payment information safer. You can also use PayPal to make online payments or to send and receive money between friends, family and business partners. Do You Need a Bank Account for PayPal?No, you don’t need a bank account to sign up for PayPal or to receive payments. You can, however, connect your PayPal account to a bank account, a debit card or a credit card account for sending and receiving payments and transferring funds. PayPal Products and ServicesPayPal offers several banking products and financing options:
Can PayPal Serve as Your Bank Account?PayPal offers several financial services and products that may serve the banking needs of some people. You can use PayPal to pay your bills, online or from the PayPal app. If you’re looking for a convenient way to get more benefits from your PayPal account, some of the PayPal credit cards, debit cards or financing options could be helpful. Especially if you can’t qualify to open a traditional bank account because of a bad ChexSystems score, PayPal may offer an effective way to manage your money. PayPal itself is not a bank, so, if you are leaving money in your PayPal account, that money is not FDIC insured in the same way it would be in a bank account. If you want FDIC insurance for your PayPal balance, your best option is to request (and receive) a PayPal Cash Card. Once you have a PayPal Cash Card, PayPal will begin to deposit your funds into a pooled account held by PayPal at an FDIC-insured bank. PayPal’s intent is to provide these funds with the benefit of pass-through FDIC insurance up to the applicable limits. With that being said, if you are keeping a significant amount of funds in your account, we’d recommend using an account that offers direct FDIC insurance. PayPal also doesn’t offer the same range of financial products and experiences as a full-service bank. One small example: PayPal doesn’t provide paper checks, often a standard feature offered with checking accounts found at banks. And, if you want the in-person experience of a brick-and-mortar bank, PayPal isn’t the service for you. PayPal also doesn’t provide other products and services that you may find at a full-service bank, such as auto loans, home mortgages, home equity lines of credit or wealth management. Alternatives to PayPalPayPal might not be able to serve as a bank replacement. If you want the protection and convenience of a bank checking account or credit union share draft account, PayPal may not be the best choice. Although PayPal can provide some helpful financial products and tools for online payments, you may want to look elsewhere for the relationship that will serve as your financial home base. Here are a few alternatives to using PayPal as your bank account:
Bottom LinePayPal offers compelling options and value-added services for people who may want a debit card, prepaid card, cash back credit card, access to small lines of credit and convenient online payments. But if you want a full-service banking experience, using PayPal as your bank account may not provide the range of services and tools you need. You may find that you get the best experience from your PayPal account while relying on a bank or credit union as the steady home base for your money. Using PayPal in addition to a bank account, not PayPal as a sole bank account, may provide the best functionality. That said, whether you use PayPal as your primary financial account is ultimately up to you and your needs as a consumer. Find The Best Online Banks Of 2022Can you transfer money from PayPal credit to bank?You cannot withdraw money from PayPal Credit directly. The only option to take is to send the money to another person's PayPal account and get them to send it back to you. Following this, you can transfer the money from your PayPal balance to your bank.
Can I transfer money from my PayPal credit to my PayPal debit card?Log in to your PayPal Prepaid Card Online Account Center, click on the PayPal Transfers1 section, and follow the steps to transfer money from your PayPal balance to your PayPal Prepaid Card conveniently and at no-cost.
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