PayPal in Canada

PayPal has skyrocketed in popularity, and last year alone, transaction revenues amounted to almost $16.1 billion. PayPal has more than 6.4 million active users across the country. But first, what is PayPal?

PayPal is a digital service that facilitates payments through e-transfers; for e.g., customers paying for shopping online. It offers the convenience of storing payment info, so customers don't have to enter their account or credit card information each time. Plus, it doesn't disclose your info to the vendor, which adds a layer of security.

In this review, we'll explain how PayPal Canada works, all the steps for signing up, verification, transfers, etc., and see what makes it one of the most well-known financial service brands.

Who Uses PayPal?

The idea behind PayPal is to give people the opportunity to make online payments quickly and securely. It turns out, quite a lot of users have subscribed to this idea:

• People: Anyone who needs to send or request money for personal reasons.
• Businesses in all industries: Beauty, B2B, clothing, computers, education, entertainment and media, financial services and products, food, government, health and personal care, non-profit, retail, travel, and even more subcategories of businesses.

Why use PayPal over other forms of payment? The main reasons are: it's convenient and does not require the payor or payee to disclose their credit card or bank account numbers.

What You Can Do with PayPal in Canada: Basic Functions

How does PayPal work? Since this platform provides financial services, we expect it to facilitate basic financial operations, such as sending and receiving money. Here is what this all-in-one online payment solution enables merchants and consumers to do.

Sending Money

You can send money to friends and family as well as use it as a payment method in numerous online stores. The platform supports both domestic and international transfers at little cost. You can make payments on the website as well as through the dedicated mobile app.

Request Payments

You can request funds from anyone in exchange for goods and services or even in situations where you've split the bill with friends at dinner. If the recipient doesn't have an account, you can still send them a request to their email. It takes mere seconds to do so.

Accepting Payments for Premier and Business Accounts

If you are planning on receiving payments for products or services offered by your business, a personal account will not suitable. The good thing is that you can upgrade your account type to Premier or Business and receive large amounts of payments.

Tools for Auction Trading

There are already many PayPal-friendly online auction sites, and any business can automatically place PayPal in their listings. At the end of each successful auction, funds will be transferred from the winning bidder to the seller using PayPal's e-mail-based fund transfer.

How Do I Get Started with PayPal?

So, you want to create a PayPal account. It makes sense you have thought about the set-up process, types of accounts, and their benefits. It's an important decision - which account would suit your purposes best, so read on.

Personal Accounts

We'll explain the difference between personal and business accounts in more detail later on. But first, here are the steps to create a new personal account on PayPal Canada:

1. Go to the website or open the app, and then click/tap 'Sign Up'.
2. Type a valid email address and create a password. You should create a strong and unique password as you would do for any online banking account.
3. Fill in the next section with your personal details: name, address, and phone number. You can't skip this step, but the company has strong policies related to the privacy and security of customer information.
4. Enter your credit or debit card (optional).
5. Enter your bank account information (optional).
6. Apply for PayPal credit (optional).

Business Accounts

If you're wondering how to set up a PayPal account for your business, the steps are as follows:

• The first step is the same - Go to the website or open the app and click/tap 'Sign Up'.
• Tick off the box for 'Business Account'.
• Enter your email address and create a password.
• Complete the required fields with your business information: legal first and last name, the name of your business, and business address.
• Review the policies for electronic delivery of communications and the user agreement and press 'Confirm'.
• You'll be taken to a screen that says 'Tell us about your business'. You'll need to enter the business type, category, subcategory, and an estimate of your monthly sales.
• Type your info, just as for the personal account. Additionally, you'll need to provide the last four digits of your social security number, your date of birth, and your home address.
• The set-up is complete!

What's the Difference Between a Personal and a Business Account on PayPal?

A personal PayPal account is a convenient way of making online transactions. For instance, you'll find it useful when shopping on many websites, transferring money to friends for dinner, or even sending your beloved a Christmas gift. A personal account gives you the ability to:

• Send payments only;
• Pay for your shopping locally and internationally;
• Get covered 24/7 by online and card fraud protection policies.

Business accounts are meant for those who want to provide PayPal Canada as a payment option for their customers. There are added benefits of features like Express Checkout or allowing limited account access to up to 200 employees. Here is what the account facilitates:

• Sending and receiving payments;
• Working with other sellers, freelancers, and businesses;
• PayPal Credit for customers;
• Business loans and working capital.

How to Link to PayPal with a Canadian Bank Account

Linking your PayPal and Canadian bank accounts is the easiest way to streamline your transactions. While American banks use the 9-digit routing number, in Canada, there are 5-digit bank transit numbers. Other than that, the process is the same for other regions:

1. Open your account.
2. Go to the 'Add Funds' section and choose 'Add Funds from a Bank Account in Canada'.
3. Select 'Add Bank Account,' and you'll be directed to a new page.
4. Here, enter the bank name, the 5-digit bank transit number, and the 3-digit institution number.
5. Type in your account number (up to 12 digits) and confirm.
6. During the next 3 to 5 days, you will receive two small deposits. When they come, open your account again and enter the amount of each deposit.

Payments: How to Use PayPal in Canada?

As with any good payment app, you can send and receive money quickly and conveniently. But first, you need to learn the steps for each action. Below, we will explain how canadian PayPal works in terms of transfers, receipts, withdrawals, etc.

How to Transfer Money via PayPal

The steps for transferring money to a bank account using a web browser are:

1. Click 'Wallet' displayed at the top of your screen on the main page.
2. Go to the 'Transfer Money' section and then - 'Transfer to bank account'.
3. Enter the account info you want to transfer funds to and click 'Next'.
4. Enter the amount of money and click 'Next' again.
5. Confirm by clicking the 'Transfer amount Now' button.

When you're using a mobile app, here is what you need to do:

1. How to transfer money from PayPal to your bank account using the mobile app
2. Tap your PayPal balance.
3. Select the 'Transfer' tab and then go for 'Transfer Money'.
4. Enter the needed bank account information (that doesn't have to be linked to your account).
5. Enter the amount that you want to transfer out of the account.
6. Make a confirmation by tapping 'Transfer amount Now'.

How to Transfer Money via PayPal to Another PayPal Account

The process is even easier when making transfers to other PayPal users. Here is a quick rundown of how to use PayPal for transfers:

1. Click on 'Send or Request Payment' tab on your account.
2. Choose the 'Send Payment' option.
3. For personal payments, select 'send money', or you can make payments for goods and services.
4. Enter the amount of money to send as well as the email ID of the needed PayPal user.
5. Confirm at the bottom of the page.

How to Accept Payments With PayPal

You don't need to learn how to receive money with PayPal. Essentially, you don't even need to do anything to receive PayPal transactions. It will be automatically added to your balance, and you'll receive an email notification.

Ways to Top Up Your Paypal Account

If you want to make a deposit from a bank account, here is how you do it from a computer:

1. Link a bank account if you haven't already done so.
2. Click 'Transfer Money', which is below your balance at the top-left corner.
3. Under the 'Money' header, you will see a button 'Add Money to your balance'.
4. Enter the amount you want to deposit in the 'Amount' field.
5. For a personal account, you'll need to click 'Add'; for a business account, click 'Transfer'.

The process of making deposits from a PayPal Canada mobile app isn't much different, and it also requires you to have a linked bank account:

1. At the center of the screen on a mobile app, you will see the 'PayPal balance' tab.
2. Go to 'Add Money' by tapping the blue button at the bottom of the screen.
3. Select 'Add from your bank' and tap on the bank name you're transferring money from.
4. Confirm, and the amount will soon be added to your balance.

There is a less common but still working way to add money to your balance - by using cash at a store. It's done in the following way:

1. Go to your closest participating PayPal retail location, which you can check on the website.
2. On your mobile app, tap 'PayPal Balance' and then 'Add Money'.
3. Select the 'Add Cash' option.
4. Tap 'Generate Barcode', and the app will show you a barcode that will be active for one hour.
5. Show the cashier the barcode. They will take the cash, process the payment, and give you a receipt.

How to Withdraw Money from Your PayPal Wallet

Any user with a linked bank account can withdraw money from their PayPal balance, you just need to:

1. Go to the 'Money Menu' within the top header.
2. Choose 'Transfer Money'.
3. The app will display your PayPal balances and bank accounts, so choose where to withdraw money from and to.
4. Enter the needed amount and continue.
5. Click 'Transfer' once you review all the details.

Paying for Online Shopping

If a website you're shopping at supports PayPal, it will be offered to you when you check out. This way, you can make a purchase without entering your credit card information on the merchant's page.

Click on the button with the PayPal logo, and enter the required account information. All online purchases will be displayed in your app in the transaction history.

PayPal Fees in Canada: Transfer Fees, Convert Rates and Limit

How much is the PayPal fee for transferring money? What about withdrawals? Naturally, there are different factors that affect the fee structure. For Canadian users, those are practically the same as for the United States.

Deposit Fees

PayPal doesn't charge anything for deposits. It includes no fees for direct bank transfers to your Paypal account. Once you link your credit/debit card or your bank account to PayPal, you can easily transfer money to it whenever you want. There are also no fees to depositing your paychecks, tax refunds, and government benefits.

There are, however, fees for depositing with cash and loading money to your PayPal Cash Card. When you go to supported stores, you will be charged 3.95 CAD for a single deposit. As for PayPal Cash Card, there is a fee of 4.95 CAD.

Withdrawal Fees

Withdrawals from the PayPal balance to bank accounts are free. If you want the withdrawal to be delivered in a check, you'll need to specifically request it - but for a fee.

The cash withdrawals are made for a charge except for MoneyPass ATM, which are surcharge-free cash withdrawals for a MoneyPass card. Normally, ATM domestic withdrawals are $2.50. But for Canada, these aren't considered domestic. It means that PayPal fees for Canada in participating bank branches or other financial institutions are 3 CAD.

Fees for Sending Money

For personal transfers from PayPal balance (for example, to friends and family in Canada), there are fees neither for you nor the recipients. However, you may be faced with charges, mainly based on the following two factors:

• Payment method. For a credit card or Visa Debit, a 2.9% transaction fee plus a fixed fee based on currency.
• Country of recipient's account. For the United States and Europe, 2.99 CAD plus a fixed fee based on currency.

To get the exact value, you need the PayPal fee calculator.

Account Maintenance Fees

There are no fees for using the account or for not using it for a long time. Meaning, the maintenance fee is 0 CAD. There is no minimum balance, and you won't be charged for inactivity or limited usage.

PayPal Limits

The daily limit for transfers is 10,000 CAD, but it can be extended, and the daily purchase limit is 3,000 CAD. ATM withdrawals are also capped at $400. What PayPal means by "daily" is a 24-hour period from midnight to midnight.

PayPal Conversion Fee

How much does PayPal charge for currency exchange? Generally, such fees are around 3%-4% but range depending on currencies involved and the intended use. For Canadian and US dollars, the conversion rate is 3.5% and 4% for other currencies.

These rates apply to the following transactions:

• If you're paying for goods or services that are listed in a different currency than the one originally registered on your account.
• If you're transferring money to other personal accounts that are not located domestically.
• If you're using PayPal's Payouts or MassPay for other currencies.

For other types of transactions, fees may be higher.

PayPal Business Account Fees

Lastly, there are business fees that apply to merchant websites that have integrated PayPal as one of their payment methods. For websites conducting sales in Canada, the fee is 2.9% plus 0.30 CAD for each transaction. US sales are charged at 3.7% plus fees depending on currencies. Internationally, merchants pay a 3.9% transaction fee.

If the payment is sent to and by charities with the approval of the Canada Revenue Agency, the fee is 1.6%.

Security

How secure is PayPal? The payment processor uses encrypted information enabled by highest-level technology, stores data on servers that aren't directly connected to the internet, and follows many other security testaments.

How to Verify My Account and Increase My Limits?

There are two options to complete the verification process. Here is how to verify a PayPal account:

1. Log into your account, click "Add or Edit Credit Card", and fill all required fields.
2. Request a 4-digit code to confirm your card.
3. Enter your PayPal code and click confirm.
4. You're verified!

Alternatively, you can link your bank account. For a step-by-step breakdown, go to our 'How to Link to PayPal With a Canadian Bank Account' section in this guide.

All verified accounts can send up to 10,000 CAD in a single transaction.

What Is Strong Customer Authentication?

Strong Customer Authentication, or SCA, is a newly adopted requirement for European Transactions. This system aims to reduce fraud and make online payments more secure, which it successfully does. PayPal implements the policy of 2 forms of authentication for all transactions to Europe.

Two Factor Authentication (2FA)

How safe is PayPal for transactions to other areas? With 2FA, very much so.

You can manually change your settings to enable 2FA for increased security. Each time you sign in or make a purchase, you will be required to enter both your normal password and a different code. The second code can be sent via an application on your smartphone or a text message (SMS) to your mobile device.

How to Reset Your PayPal Password?

If you forgot your password, here is how to fix this issue very quickly:

1. Select the 'Having trouble logging in?' link on the PayPal login page;
2. Enter your email address that is associated with your PayPal account and verify it;
3. You will receive a 6-digit code that you need to enter on the login page.
4. Then, you will be redirected to a page where you can enter a new password.

Alternatively, you can choose to receive a text, answer security questions, confirm through Facebook Messenger, or require authorization through a Google email account.

PayPal Refund in Canada

Getting a shipping refund is relatively easy, although it may take some time for processing. Here is how to refund on PayPal and what qualifies you for one.

How Do Refunds on PayPal Work?

If you're unhappy with a product you buy, there has been a mistake with the merchant, or it didn't arrive, you can contact the PayPal Resolution Center. While your claim is getting sorted, you can check the refund status to see what is going on:

• Pending: Your refund has been approved and sent, and the bank is processing the transaction.
• Temporary hold: The bank didn't manage to clear your initial payment so you'll receive a refund soon.
• Completed: On the recipient's side, the operation has been finalized, but it still means you'll wait another 3-5 days.
• Refunded or partially refunded: The money is in your balance or credit card, depending on what you used for the purchase.

How Do I Request a Refund in Canada?

PayPal covers up to 12 returns per year regardless of the country your account is registered in. The process is as follows:

1. Ship your purchase back according to the merchant's terms. When returning the package, make sure you keep the shipper's receipt.
2. Send PayPal the request and show proof that you've purchased the product within the last 30 days.
3. Once approved, you'll receive the requested amount to your balance.

Are PayPal Refunds Instant?

Generally, all claims are processed within 10 days. Then, the refund timeline depends on what you used as the payment method:

• Credit card (including PayPal Credit) - Up to 30 days;
• Bank account - 3-5 business days;
• PayPal balance - The same day as the refund was approved.

Will PayPal Refund Me If I Get Scammed?

Common questions users have are "can I get scammed with PayPal" and "can I be refunded if I do?". The platform has a favourable dispute resolution policy, and they make sure to investigate every suspected case.

Such instances are covered by the PayPal Purchase Protection, for example:

• You were promised one product but received something else;
• An item was advertised as new but turned out to be used;
• The seller didn't report damage;
• It was a knock-off product.

PayPal Mobile Apps Review

Mobile payments are a natural extension of all the daily tasks that users demand of their smartphones. Notably, PayPal works not only through the browser version but also on multiple mobile devices. Let's see how efficiently the company meets the demand.

PayPal on iOS

The payment system works the same as the online version and, overall, is considered convenient, clear to use, and with quick processing times. The app has an average rating of 4.5 out of 14 thousand reviews.

Pros:

• Easy to set up and operate
• Works internationally
• Excellent security track record
• Shows online and activity separately

Cons:

• Has stronger competitors
• Lacks connectivity

PayPal Apps for Android

The PayPal app is free to download at Google Play and has over 100 million downloads and a rating of 4.3 (rated by 1.4 million users). The interface and functionality are identical to the iOS one, so the pros and cons are the same for both apps.

PayPal on Android connects to Google Pay. However, the selection of stores isn't as vast as for Apple Pay.

Alternatives to PayPal for Canadians

Let's compare some of the biggest payment services in Canada. Bear in mind that all of these services are great at what they do. Some are better for one purpose; some are more suited for other ones. In fact, you might even end up needing to use more than one.