How PayPal Works With eBay

How PayPal Works
PayPal allows any individual or business with an email address to send and receive money online. It serves as a middleman between the seller and buyer, who both provide their bank accounts and/or credit card information via encrypted software directly to PayPal, rather than to each other. This is an additional security feature that keeps account information private and secure.
PayPal's Function on eBay
eBay is an online auction site in which users bid on items in auctions. When an auction is won, the winner must arrange for payment via a check, credit card or PayPal. Because it is fast, easy and secure, many eBay sellers offer PayPal as their only payment option. Many buyers prefer PayPal because they do not have to provide their credit card information directly to merchants. The vast majority of eBay sales are paid for via PayPal.
Creating a PayPal Account
To pay for eBay merchandise with Paypal, a PayPal account must first be set up at PayPal.com. The user must provide a name, address, phone number, email address, login name, password and answers to two security questions. Either a credit card or bank account information can be added, depending on the user's preference for a fund source. PayPal will send a confirmation email with additional information about creating the account, terms of use and the account verification process.
Paying for eBay Merchandise Via PayPal
After winning an eBay auction, the user is directed to a payment page. When selecting PayPal, the user will be redirected to a PayPal page. The user will confirm the amount for payment and fund source. PayPal then withdraws the funds from the user's bank account or makes a charge to the credit card on file, and deposits the money in the eBay merchant's PayPal account. PayPal deducts a small fee from the sale, which affects only the seller. A confirmation email regarding the purchase is sent by PayPal to both the buyer and the seller. The money remains in the merchant's account until it is withdrawn or used to make purchases.