PayPal

Definition

PayPal is a financial services company that provides online payment processing and money transfer services. It allows individuals and businesses to send and receive payments online, as well as to make online purchases.

Analogy

PayPal is like a digital wallet.

Imagine you have a wallet in your physical pocket or purse that you use to store your cash, credit cards, and other forms of payment. PayPal is like a virtual version of that wallet, but instead of storing physical currency, it stores digital payment methods like credit cards and bank accounts.

Just like how you can use your physical wallet to make purchases in person or online, you can use PayPal to make purchases online or send money to others. It's a convenient way to store and manage your payment information in one place, and it's also a secure way to make payments online.

In other words

PayPal is an online method to accept payments from your customers.

Why is PayPal important?

It's one thing to know what PayPal is, but that is worthless if you don't know why you should know what PayPal in the first place. Let's break down the importance of this tech term based on two high level categories. We'll walk through an explanation as well as provide a score, 1-10, that shows you how much you should care about PayPal.

Pre-Product: 2/10

The first will be if you do not have a product yet. This means that you don't have a physical product. Maybe you're in the ideation phase, or maybe you're almost ready to start development. Whichever it is, we'll get into why PayPal is important and why you should or shouldn't care about it if you do not have a product.

If you don't have a product, you likely don't need to worry about PayPal just yet. If you are building a company that will accept payments, you should maybe consider familiarizing yourself with PayPal.

Live-Product: 6/10

The second category is if you do have a live product. Maybe you just launched your business or maybe it's been live for years and you're continuing to improve its quality. Regardless of the scenario, if your product is live, PayPal carries a different weight.

You should care about PayPal if your product is accepting payments. If so, you should consider PayPal or its competitors to provide users multiple pathways to pay you.

Examples of when to use PayPal

So you know what PayPal is, by definition. You know if you should care about it or not depending on your situation as a business/company/product. To dig in deeper, we will walk through some examples so we can make sure you really have a solid grasp on PayPal.

Here are three example use cases for PayPal:

1. Making an online purchase: You can use PayPal to pay for goods or services on any website that accepts PayPal as a payment method.
   
2. Sending money to a friend or family member: If you need to send money to someone else, you can use PayPal to easily and securely transfer funds.
   
3. Receiving payment for goods or services: If you sell goods or services online, you can use PayPal to easily accept payments from your customers.

Key Takeaways:

1. PayPal is a financial services company that provides online payment processing and money transfer services.
2. If you don't have a product, you likely don't need to worry about PayPal just yet.
3. You should care about PayPal if your product is accepting payments.
4. You can use PayPal to make an online purchase, send money to a family member, or receive payment for goods or services.