DollarBreak goal is to empower readers to make better financial decisions. This post may contain affiliate links from our partners who share the same vision. Disclosure.
If you want to receive money from a friend or family member, you might consider doing so through PayPal.
It’s certainly the daddy of electronic payments.
In the second quarter of 2019, PayPal’s net payment volume totaled $172.36 billion, an increase of around 23% in the same quarter of 2018 (source: Statista).
We’re going to show you how easy withdrawing money from PayPal is, but we’re also going to examine if it’s the smart thing to do.
Sending and Withdrawing Money on PayPal
When it first came to market, PayPal transformed the way people thought about transferring money. Suddenly they weren’t tied to banks and their outdated ways of doing things.
Here was this knight in white armor willing to take on the banks at their own game. PayPal made paying for things online and transferring money to others easy.
Withdrawing Money from PayPal
Money sent to you is credited to your PayPal account, if you have one. If not, you’ll need to set one up. Assuming you have a PayPal account, here’s how you withdraw funds:
- Log into your PayPal account.
- Navigate to your wallet.
- Click ‘Withdraw’.
- Choose the account to which you want to send funds.
- Key in the amount to send and click ‘Continue’.
- Check the amount and confirm the transfer.
Sending Money on PayPal
It’s easy for someone to send money to you through PayPal. Via PayPal, you can pay for things and transfer money online, and you can link your PayPal account with your banking account or credit card. Sending money to someone is a five-step process, and you can send money to anyone with a cellphone number or email address. All you need to do is log into your PayPal account and:
- Click ‘Send & Request’ at the top of the page.
- Select the option to send money.
- Enter the email address or mobile number to whom you are sending money.
- Enter the amount you want to send and click ‘Continue’.
- Review and confirm the information on the screen and click ‘Send Money Now’.
If you are sending money to friends or family, there is no charge.
Quick and Easy – But Is Using PayPal Smart?
It’s quick and easy to send money via PayPal and request a withdrawal, but there are a couple of issues you should be aware of before you do either. They could be game changers.
First, your friend or family member might be charged to send money to you. If they are using their PayPal balance of their bank account to fund the payment, then no charge will be made. But, if they send money via a debit card or credit card, there will be a charge.
Second, while it is easy to request withdrawal of money into your bank account, this doesn’t mean it will be quick. A transfer from your PayPal account to your bank account could take as long as five working days to process. Then, if there is a problem with the withdrawal, it could be a week before the money is returned to your PayPal balance.
That fast payment and withdrawal may not be as fast as you thought and could take days. Not much good if you need the money right away.
Fortunately, there are other ways to send and receive money. One of these is by using Zelle.
Welcome to Zelle
A couple of years ago, Zelle quietly entered the direct transfer market. It promised something that other payment systems find troublesome – security. While they are generally safe, using apps like PayPal’s sister company Venmo can come with risks. Summarized, these risks are:
It can be impossible to resolve problems
It is almost impossible for you to understand your rights if you are the subject of fraud or error. It’s easy to send money to someone you don’t know (one letter wrong on an email address, for example).
If the recipient refuses to return it, the provider won’t usually help you recover your misdirected funds.
Security of payments
On most payment apps, you don’t need to enter a password, fingerprint or PIN if your default settings are set up. This means that anyone could make a transaction from your cellphone.
Privacy is Questionable
Many payment apps reserve the right to sell information about you to third parties. Some apps like Venmo (owned by PayPal) share certain ‘social’ information automatically. To opt out of this, you must turn off the setting.
Banks understood that people want to use payment apps, especially to transfer money to their peers, and decided that they needed to be in this market. So, they set up Zelle, an in-app P2P payment system that processes payments and acts to connect between banks.
By the second quarter of 2019, almost 500 banks and credit unions had agreed to join Zelle. When all these banks are connected, Zelle will cover almost two-thirds of U.S. deposit accounts.
What Does Zelle Do Differently?
Payment apps like Venmo have high appeal to millennials, primarily because of their social functionality. Zelle doesn’t include this. If you transfer money using Zelle, you won’t see a post telling the world you have just enjoyed a fantastic Chinese meal at the Hong Kong Downtown Diner.
For many people (and increasingly millennials, it seems), having their social habits and spending patterns broadcast to the world is something they would rather not happen.
Perhaps, though, the biggest win for Zelle is around security issues. Being founded and led by banks, Zelle’s app is embedded into many of the mobile banking apps used by banks. This gives users an extra degree of security and comfort.
Because Zelle is embedded into existing bank apps, you don’t necessarily require an additional app. Therefore, it is possible to create an account in less than a minute, with no need for extra layers of identity verification.
When you transfer money, the transaction is immediate. You don’t have to wait hours or days for the transaction to appear in your bank account.
Sending and Withdrawing Money on Zelle
Like sending money on PayPal, it is easy to send money on Zelle. Simply follow these steps:
- From your online banking app, click on ‘Send Money with Zelle’.
- Add the recipient, by name from your list of recipients. If this is a new recipient, you will need to set them up first.
- Enter the amount you wish to send.
- Select which account you want to use to fund the transaction. Click ‘Continue’.
- Review the payment details and send.
Your recipient will be notified, either by email or text.
Withdrawing Money from Zelle
If you have received a message telling you that you have received money via Zelle, you will need to enroll with Zelle to access these funds. To do so:
- Click on the enrolment link provided in the payment message sent to you.
- Select your bank.
- Follow your bank’s Zelle enrolment instructions to receive your payment.
Once you are enrolled with Zelle, any payments you receive through Zelle will be automatically and immediately moved to your linked profile bank account. You don’t need to request the funds; they are transferred to your account with no further interaction required.
Is Zelle the Payment App for You?
PayPal has been the big player in the online payments arena almost since its launch, but with Zelle as competition this dynamic appears to be changing.
It may be the new kid on the block, but Zelle is growing rapidly. PayPal’s growth in net payments is eye-catching. Zelle’s growth is more than double, at 56% year-on-year. It’s not hard to see why:
- Zelle’s appeal is multigenerational, as millennials through to baby boomers and beyond seek greater privacy in an increasingly cashless society
- Backed by the banks, Zelle allows you to send funds easily using your bank’s online app
- When you’re receiving funds, there’s no need to log in and request funds like you do with PayPal
- Cash is transferred immediately, at no cost
PayPal’s dominance in the money transfer market looks like it could be coming to an end. Our vote goes to Zelle: it’s easy to use, fast, free to set up, and highly secure.
The post Is Withdrawing Money from PayPal the Smart Thing to do? appeared first on DollarBreak.
from DollarBreak https://ift.tt/2ZAikEn
0 Comments