You are on page 1of 5

E-Commerce Report on PayPal MBA III, Pokhara University. Submitted to: Mr. Tika Upreti Mr.

Roshan Regmi

Submitted by: Bikram adhikari Bishnu khanal Drone C Ghimire Santosh Sharma Sushil Aryal Date: April 11, 2010 1. Introduction to PayPal:
PayPal is the world's most popular "middleman service" for online purchasing. Where money grams and wire transfers were the standard in the 20th century, today over 99 million Internet users prefer to use PayPal to send money to each other via email. PayPal has become such a convenient and trusted way to transfer money online, 95% of eBay's purchases go through PayPal. As an online financial transaction broker, PayPal lets people send money to each other's email addresses. At no time will either party see the other's credit card or bank information. PayPal acts as the middleman holder of money. Through its policies, practices, and business integrity, PayPal has earned the trust of both parties. With multiple guarantees in place, buyers and sellers entrust PayPal with their credit card and bank information. PayPal keeps that private customer information secret. Then, while "blinded" from the other party's confidential information, strangers safely send money to each other through PayPal and email.


PayPal Requirements

You need neither special technology nor a business license to send/receive money through PayPal as a middlemen bank. One can get easy access to the PayPal a valid email address and a valid credit card or bank account. Precisely because it is so easy to use, PayPal is the favorite of millions of amateur sellers and buyers around the world.

3. How Does PayPal Withdraw Money :

PayPal is flexible, amateur-friendly, and able to extend its own form of short term credit. your choices are as follows: we can just let PayPal withdraw against your credit card or bank account only when you make a purchase. Once you send money, PayPal will send the funds immediately, and then will withdraw the funds from your bank /credit card within two business days. With this option, there is no need to maintain a direct PayPal balance, and there is no fee to use these techniques. You may transfer money to PayPal directly, and leave that money in your PayPal account. Although you will not gain interest with this method, it does make it more convenient to separate your online purchasing budget from your regular banking and credit cards; there is no fee to use these techniques, either.

4. How does PayPal make Money?

As a middleman financial broker, PayPal makes its profit by charging a percentage of the money it transfer to the customer. PayPal is free for buyers. Once a buyer sets up a PayPal Account, then it costs nothing to send money to other PayPal users. The funds are withdrawn from the users Credit Card or bank account, or both. PayPal does not charge buyers to send money. PayPal charges seller 1.9% to 2.9.paypal will charge sellers to receive funds. Using a special surcharge formula, PayPal will bill seller whenever they receive a payment from a buyer.

5. How safe is PayPal:

As one of the best method of the online transfer for money it is one of the safest methods for transaction. Although no system is 100% foolproof, PayPal has designed many checks and balances into its system to keep errors and frauds to be a bare minimum. You wont find another online financial institution thats better at protecting its customers than PayPal. By utilizing the very latest in secure technology and employing a large team of experts in all areas of online safety, PayPal continues to be a leader in safe online payment around the world. PayPal guarantees 100% protection against unauthorized payments from consumer account. Every transaction consumer wishes to dispute will give consumers access to 24/7 support team of analyst who will sort out the problem for the consumer. A service called PayPal Buyer Protection is another way that PayPal will certify that certain sellers are trustworthy. Using sophisticated risk models and advance technology, the team is able to detect, and often predict, suspicious activity to

help eliminate identity theft. The Anti Fraud teams sole job is to make every PayPal transaction is safe and seamless as possible.

Choice 1: PayPal Personal Account

This type of a PayPal account has all the functionality of the personal account, plus sellers can accept credit and debit cards, and bank account payments. Premier account also offers such features as Shopping Cart and payment reporting tools. This account type is good for a serious amateur seller who wants to move items on a regular basis. There is a fee to have a premier account; the set up process of a premier account is similar to that of a personal account. If sellers currently use a personal account, they can always upgrade to premium.

Choice 2: PayPal Premier Account

Although no system is 100% foolproof, PayPal has designed many checks and balances into its system to keep errors and frauds to a bare minimum. You wont find another financial institution thats better at protecting its customers than PayPal. By utilizing the very latest in secure technology and employing a large team of expert in all areas of online safety, PayPal continues to be a leader in safe online payment around the world. PayPal is guaranteed against fraud and identity theft. eBay purchases can also be insured up to $1000 through PayPal PayPals Anti Fraud Team Works 24/7 Many other PayPal safety measures distinguish the service from its competitors.


Security Measures in PayPal

IPN notifies you when an event occurs that affects a transaction. Typically, these events represent various kinds of payments; however, the events may also represent authorizations, Fraud Management Filter actions and other actions, such as refunds, disputes, and chargebacks. IPN is a message service that PayPal uses to notify you about events. These events include the following:

Instant payments, including Express Checkout and direct credit card payments check payments and associated status, such as pending, completed, or denied

Payments that may be pending for other reasons, such as those being reviewed for potential fraud Events related to recurring payments and subscriptions Authorizations, which indicate a sale whose payment has not yet been collected

Chargebacks, which are initiated by a credit card processor; for example, when a customer disputes a charge

Disputes, which are initiated by a buyer using the PayPal resolution process Reversals, which occur when you win a dispute or a chargeback is canceled Refunds, which you may choose to give

In many cases, the action that causes the event, such as a payment, occurs on your website; however, your website is not the only source of events. In many cases, events can be generated by Website Payment Standard buttons, the PayPal API, or by PayPal itself

7. Payment Procedure

First the customer enters in the PayPal website while purchasing the goods and services through ebay or any other business houses and other stores. After when the customers gets goods and services he/she enters his/her bank a/c number with valid e-mail address or PayPal a/c number. After than the seller conforms the customer identification. And PayPal securely sends the payment to the sellers PayPal account. When the payment is send to the sellers PayPal account the seller confirms his PayPal account. Then the seller can either deposit the amount in his bank account or PayPal account. Finally the transaction is settled without the confidential information being disclosed between the parties involved.

8. Conclusion

PayPal is one of the most popular medium for online purchase of goods and services. Its service allows anyone to pay in anyway they prefer, including through credit cards, bank accounts, without sharing financial information. It has one of the best security systems so as to ensure activities involved in purchases. It is able to satisfy customer needs in changing information technology. After consumer has made the payment, they will receive a receipt in their E-Mail conforming that the payment has been sent to the seller. The seller also gets an email notification of the payment and they will proceed to ship the item to the consumer. Most likely, the customer will receive a follow message from the seller that their item is on its way. IPN is an asynchronous message service, meaning that messages are not synchronized with actions on your website. Thus, listening for an IPN message does not increase the time it takes to complete a transaction on your website. The IPN message service does not assume that all messages will be received by your listener in a timely manner. Because the internet is not 100% reliable, messages can become lost or delayed. To handle the possibility of transmission and receipt delays or failures, the IPN message service implements a retry mechanism that resends messages at various intervals until you acknowledge that the message has successfully been received. Messages may be resent for up to four days after the original message. As customer will discover themselves, making PayPal payment is indeed a very easy process. No more sending cheques or money order via SNAIL MAIL, or typing in customer credit card details, and no more stamps and trip to the post office. The convenience of using a PayPal account is why 96 million people use PayPal every day. Easy to set up, easy to use, and it saves consumers time as well.