Can i transfer money from paypal credit to bank account

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PayPal is a convenient way to send money to a friend or family member and was probably the largest force in changing the way we send money to other people. As of 2022, 209.3 million people worldwide use PayPal to send money to friends or acquaintances.

Naturally, you might wonder if you should use a credit card to send money to another person using PayPal. After all, your credit card earns rewards—Why not earn additional cash back or transferable points when sending money?

Generally, the fees PayPal charges to send money to another person using a credit card are greater than the rewards you will earn, making it unattractive to use a credit card to send person-to-person money transfers through PayPal. There are some exceptions to this, but banks are also changing the way these transactions are processed, which might subject you to additional fees. Read on for more details.

PayPal Is Much More Than Person-to-Person Payments

PayPal checkout is integrated onto many websites and many smaller merchants use PayPal to invoice and accept payment for goods and services. Those types of transactions have a separate fee structure and are processed differently than person-to-person transactions. This article specifically covers using PayPal to send money to another person, not to pay for a purchase.

The Deal Breaker: Transaction Fees

One of the biggest drawbacks of using a credit card to send money to another person using PayPal is the processing fee. PayPal charges 2.9%, plus a fixed fee of 30 cents to process a person-to-person money transfer using a credit card. This fee can quickly eclipse any credit card rewards you might earn.

PayPal does not charge this fee for person-to-person money transfers using either your existing PayPal balance or a money transfer from your checking account.

Why Using a Credit Card Might Still Be Attractive

Despite the fee PayPal charges, there are a few cases where you could come out ahead after the credit card fee.

Credit Cards With Rotating 5% Bonus Categories

Some credit cards, such as the Chase Freedom Flex℠ offer rotating categories in which cardmembers enroll to earn 5% cash back. Categories earning bonus cash back change quarterly and have earning caps before their base rate earnings of 1% apply. Chase Freedom Flex℠ has historically included PayPal in the bonus cash back offering.

• In 2020, Chase included PayPal in its cash-back calendar during Q4 (October through December).

Welcome Bonus Spending

If you have recently applied for a credit card that offers a welcome bonus after a certain amount of required spending, it might make sense to use PayPal to send money to another person using a credit card.

Beware The Cash Advance Fee

In 2020, the New York Times reported on a change in the way that money transfer transactions are coded and processed through Visa and Mastercard. This change means that banks can now charge cash advance fees for things like person-to-person money transfers through services like PayPal and Venmo.

Since this change has been implemented, some credit card users have reported being charged a cash advance fee when sending money using PayPal. In addition, Chase has been reported to be sending notices to existing cardmembers updating their terms and conditions to include person-to-person money transfers in the list of transaction types where they charge a cash advance fee.

Bottom Line

Generally, it is not advantageous to send money to another person using PayPal and a credit card.

Unless you are using a credit card that earns 5% back on transactions at PayPal or completing a welcome bonus spending requirement, you will usually pay more in fees than you earn in rewards. In addition, with banks starting to charge cash advance fees for person-to-person payments, there is a chance that your person-to-person payment may end up costing a lot more than the 2.9% fee.

If you are looking to send money to someone using PayPal, send money using your PayPal balance or linked checking account. For PayPal alternatives, consider some of the best ways to send money.

Finding out how to withdraw money from PayPal is obviously a key question for every PayPal user. No matter if it is from an invoice, a e-commerce site or checkout, an important part of working with any payment gateway is to be able to withdraw the money when convenient.

The good news is that withdrawing money is a relatively easy task.

However, the process can be handled in different ways, so in this article, we'll explain in detail what you need to do for withdrawing your Paypal balance. We'll also share some handy tips and information to help you with the withdrawal. 

In short, there are 2 ways to withdraw funds from your PayPal account.

You can either transfer the balance to your bank account or withdraw cash from an ATM using the debit card linked to your Paypal account.

How to withdraw money from PayPal to your bank account

To transfer money from PayPal to your bank account you can either use the PayPal application (mobile app) or transfer online via the PayPal website.

However, the first thing to do is to associate Paypal with your bank account.

How to link your bank account with Paypal

Follow the steps below to connect your bank account to your PayPal account:

1. Click Wallet at the top of the page (if you're using the Paypal app, tap Menu then Wallet).
2. Click Link a bank account.
3. Select your bank, or click Don't see your bank? at the bottom.
4. Depending on the bank you select, you may have the option to connect to your bank instantly using your online banking login information. If the instant connection isn't available, just enter your bank account details manually and click Agree and Link.

Linking Instantly and Linking manually: how it works?

1. Linking Instantly

To connect your bank account instantly, you'll need to enter your user ID and password for your online banking.

PayPal will match this information with your bank to confirm your account ownership.

Once this information is entered correctly, your bank account will be confirmed instantly.

2. Linking Manually

If you enter your bank account number manually, you'll be prompted to confirm this bank account. For security reasons, withdrawing money from your PayPal account is only possible in your confirmed bank account.

Within 3 business days, review your bank statement to find 2 small deposits (each between $0.01 and $0.99 USD) that Paypal has sent to your bank account. 

You will need this information to complete the confirmation process which can be done by following the steps below:

1. Click Wallet at the top of the page.
2. Click the bank you want to confirm.
3. Enter the exact amounts of the 2 deposits made to your account.
   For example, if you receive two deposits of $.05 and $.15, enter .05 and .15 on the screen.
4. Click Submit.

Some important notes:

• Sometimes the two deposits are merged together into one depending on the bank. If this is the case you will have to contact Paypal
• You can link up to 8 bank accounts to your PayPal account. Each bank account can only be linked to one PayPal account at a time.
• The transfer time taken is usually 1 business day but it can vary depending on where the target checking account is located.

Transfer money from PayPal to your Bank Account

Once your bank and Paypal accounts are linked, the process to withdraw money is quick and easy.

1. Log in to your Paypal account and go to your Wallet.
2. Click Transfer Funds.
3. Click Transfer to your bank account.
4. Follow the instructions to complete your withdrawal.

In case you want to withdraw funds through your PayPal app:

1. Tap PayPal Balance on the home screen.
2. Tap Withdraw Funds.
3. Follow the instructions to complete your withdrawal.

Note that you will have to verify your Paypal account before withdrawing funds to your linked bank account. A withdrawal cannot be canceled, so make sure that all banking details are correct before instructing the bank transfer.

What are the fees charged by Paypal?

Depending on where your Paypal account is opened, how you withdraw money, and in which currency, fees may be applied.

These fees can represent up to 1.75% of your Paypal balance transferred out of the account.

Check out the details by clicking this link and going to ‘fees' located at the bottom of the page.

How to withdraw money using your PayPal Debit Card

If you would like to spend the PayPal balance held on your account immediately, another way of converting it to cash is to have a PayPal debit Mastercard. 

However, only PayPal users with a registered business account are eligible to receive and use the debit card. 

If you have a business account you will be able to spend your balance conveniently, anywhere, and anytime in shops or online stores. 

Your linked debit card can be used to withdraw cash from most ATMs worldwide. There are no monthly or annual fees as well as no minimum balance required to use the debit card.

PayPal Fees and Exchange Rate

If you are looking to exchange the currency upon withdrawal you will have to pay a conversion fee.

PayPal has an integrated currency calculator within the app where you can view the PayPal exchange rate. 

Here's how to access it:

1. Go to your Wallet page.
2. Click Currency Calculator.
3. Select the currencies you want to convert from and to. The exchange rate appears automatically.

How does PayPal set its exchange rate?

• PayPal receives a wholesale rate quote from its bank twice a day and adds a percentage to determine the retail foreign exchange rate to apply to transactions that involve a currency conversion.
• According to PayPal themselves, their exchange rates are competitive with conversion rates used by banks.
• Note that when you transfer from your PayPal account to your local checking account, PayPal automatically converts the money into the local currency when the transfer is initiated.

How to get a better rate when exchanging your PayPal balance?

What if you would like to pay less when making transfers into different currencies?

One way to do this is to switch your funds first within PayPal before making your withdrawal. 

This is because the exchange rate margin is lower by about 2.5% when converting the currency without withdrawing.

It's a simple process, but make sure you know your stuff beforehand!

In conclusion, there is a lot of information offered by PayPal on how to withdraw money however there are some things that you should know about before making withdrawals. 

PayPal might not explicitly give such as the exchange rate mark-ups and certain charges or how to ensure that you get a fair rate by transferring your currency first.

Are you looking for more alternative ways to make payments? Is PayPal reaching its limits for your business payment needs?

Check out what’s possible with a Statrys Business Account; you'll be able to make payments smarter, with no limits, and full functionality.

You might also be interested in how to make payments with PayPal. Or possibly adding money to PayPal.

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