PayPal is a veteran option for making swift online purchases, and its mobile payment app works just as well for sending money to friends. The free service has a no-nonsense approach compared with Venmo and its attempt to tap into social media-style status updates. One big caveat for in-person payments is that it doesn't offer NFC payments directly through the app (you must add it to a digital wallet like Apple Wallet or Google Wallet, our Editors' Choice winner for Android mobile payment apps). Nonetheless, PayPal is an excellent tool for sending money to friends, paying for goods online, and—in limited cases—paying brick-and-mortar vendors.

Cards, Plans, and Fees

After downloading the app, you must create a PayPal account if you haven't already got one. Then, you confirm your mobile phone number and enter your bank account information. You can also verify your account by being approved for a PayPal credit card.

PayPal debit and credit cards (powered by MasterCard) offer rewards and cash back with certain purchases. As expected, the debit card lets you withdraw and add funds to your PayPal balance at select ATMs. Interestingly, PayPal offers a savings account that accrues interest, which you can link to your balance or PayPal debit or credit card.

(Credit: PayPal/PCMag)

There are three PayPal account levels: Personal, Business, and Payments Pro. Personal is for people who want to buy online or send money to friends. Business caters to people who do a little selling online. Payments Pro is a full-fledged e-commerce shop.

Buying items online is always free for the purchaser. As with all payment apps, PayPal adds a 2.9% fee if you use a credit card as a source of funds to pay someone. The same fee is applied if you use a debit card, sell something, or request money from someone using a credit card. Transferring money to a linked bank account is free, but you must pay a 1.75% surcharge if you want a same-day instant transfer (the fee maxes out at $15). Transfers to other countries incur different (and higher) fees. You can view the full fee listing on PayPal's site.

Sending Money, Requesting Money, and Making Purchases

We installed the PayPal app on iPhone 15 Pro Max and Google Pixel 6 Pro phones (unlike Google Wallet, PayPal is available on Android and iOS). The mobile interface is identical on both platforms. The home screen has sizable buttons for sending and requesting money, and options for managing your account, seeing activity, and paying local eateries and charities.

Paying a contact is as easy as sending money using Apple Pay (the Editors' Choice winner for iOS mobile payment apps) or Google Wallet. To find people, grant PayPal access to your phone contacts. After you select a contact, the app asks whether it's a payment to friends and family or for goods and services. In the latter case, you may be eligible for PayPal Purchase Protection (more on that later).

Next, you get the simple numeric keypad to key in the amount to send. Afterward, you choose the payment source, such as a card or bank account. The last step before sending the funds is the option to add a note. That word optional is important, as Venmo insists on your adding a note with all payments, which we find off-putting. Tap send now, and your money starts flowing to your contact. Requesting money follows an identical process, but the money flows in the opposite direction.

If you do not have a verified PayPal account, you can send a one-time payment of up to $4,000. If you wish to send more money or do so more frequently, you must verify your account. Once verified, you can send money as often as you like, but there is a limit of $60,000 per transaction. Some restrictions apply based on your type of currency and your PayPal balance. You can view more details in PayPal's user agreement.

Like Venmo, PayPal's app lets you split costs with friends. Using the Money Pools system, you can collect money from people for events like birthdays, office gatherings, or weddings. You create a pool by giving it a name and optionally specifying a purpose, amount, and end date. You can let contributors pay any amount. Likewise, you can specify an exact total or minimum amount. In a nice touch, PayPal lets you add an image and statement, and publish the Money Pool to the web.

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(Credit: PayPal/PCMag)

The PayPal app has a cashless, in-store purchasing feature that leverages QR codes instead of relying on near-field communication (NFC) the way Apple Pay and Google Wallet do. The app lacks NFC functionality, but you can add PayPal as a payment option on either wallet app to circumvent this limitation.

Other Payment Features

As mentioned, the PayPal app features QR code support so people can scan your phone's screen to send a payment (or vice versa). This makes it easy to verify that the money is going to the correct recipient. You also get a PayPal.me address, a unique URL for requesting payments. If you go to paypal.me/username, for example, you can send money without knowing the recipient's email address. As with Venmo, use caution when exposing this address to the public—you can open yourself up to scams like being paid from nefarious sources of money and then held accountable.

One nice thing about paying someone via PayPal is that, unlike Venmo, they don't have to have the app installed; they just need a PayPal account. You can pay on the iPhone via Siri. Google Wallet lacks peer-to-peer payments.

The app's web interface is similar to the regular PayPal site. It shows all your activity and offers the same payment options as the app.

(Credit: PayPal/PCMag)

PayPal has an advantage in international payments. It works in more 200 countries using its own Xoom service. By comparison, Cash App and Venmo are US-only services. Sending money via Apple Pay is limited to the US and only for Apple device users, though the company is working on expanding its reach. Apple Pay for point-of-sale purchases works in many countries, however.

In a handy consolidation, the PayPal app shows not only your person-to-person activity but all of your PayPal purchases, even those not made in the app. Other perks include adding vendor loyalty cards to save yourself from finding the physical reward program cards when you pay. This is similar in function to Apple Wallet and Google Wallet, though these services also let you save transit passes, IDs, and digital keys. There's also a Donations section that lets you find and contribute to charities of your choice.

Like Venmo, PayPal lets you receive payroll money and government deposits (like tax returns and stimulus checks) through your account. To do this, PayPal shows you a routing and account number to enter the payer's site.

Security and Privacy

One of PayPal's greatest strengths is its PayPal Purchase Protection policy. That's the company's nearly ironclad guarantee that you will either receive the goods and services you bought or get your money back. This adds a layer of protection between your credit card and the vendor. When you buy something with PayPal, the vendor never gets your credit card details even if the purchase price is ultimately going to your credit card. It's a smart solution to many of the problems with online shopping and potential fraud.

PayPal uses Fraud Protection to help combat fraud and keep your data safe. That said, PayPal suffered from a data breach in December 2022. The threat of hackers and breaches is ever-present and has affected some of the largest financial services, including Equifax, JP Morgan, and even the international SWIFT bank transfer system. Do your part to make sure your data is as safe as possible from your end.

PayPal's policies prohibit quite several activities using its service. It has had accusations of censorship leveled against it from both conservative groups and those who take umbrage to its self-appointed role as a morality cop when it comes to adult materials and services. Sellers can experience long periods with their money frozen and lifetime bans from the service. While these matters don't affect you if you're just using it to pay friends or split payments, it doesn't hurt to be aware of the issues and to know that some take a dim view of the service.