PayPal was founded in 1998 as a response to the demand for a fast, safe, and simple solution to making purchases online. Capitalizing on the rapid growth of online auction leader, ebay, PayPal quickly rocketed to the top of online payments between people. Leveraging this partnership with ebay, PayPal continued to grow, acquiring companies and becoming a tool for online shopping. The company has developed solutions for web payments globally. Recently, PayPal and ebay ended their long-term partnership and PayPal is poised to grow in the mobile wallet industry, specifically for smaller mom-and-pop businesses with their mobile app and PayPal Here POS terminals and card readers.

PayPal is lacking in the number of brick-and-mortar retailers at which accept PayPal payments, which hurts their overall rating with the Review Team. According to the company, PayPal will soon be offering contactless payments at existing terminals, which will greatly expand their customer base.

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The Good

Easy setup
Link your bank
Security measures

Easy Setup

PayPal is one of the leaders in the online payment field and is working to expand their market share in the mobile wallet industry. PayPal's strengths include:

PayPal is extremely easy to set up and use the service and app.
PayPal's track record allows for relationships with the majority of financial institutions, with easy integration of bank accounts from most banks nationwide.
PayPal is commonly used inside apps for purchases.

In order to use your mobile wallet, PayPal requires users to create an account with them and then download their free app. This process is straightforward and takes less than 5 minutes to complete. PayPal requires a bank account to support the service. PayPal itself is similar to a type of checking account from which users may use to make purchases. One of the benefits of this particular arrangement which has long been appreciated by PayPal's millions of faithful users is that when making purchases, one's financial information is never shared. This feature adds an extra layer of security to making purchases. Buying items online in various apps is as simple as clicking/tapping a "Pay with Paypal" button, signing into one's PayPal account and confirming the purchase.

Link your Bank

Users are able to link their current bank account information to their PayPal account quite seamlessly, and most major banks are compatible with PayPal, come with links allowing the user to easily find the information required to set up and confirm their account information with PayPal. For those who belong to a smaller bank or credit union, the set up and linking of a bank account requires a few additional steps, but remains simple to complete. PayPal's mobile app is compatible with iOS (iOS 7.1+), Windows, and most Android devices.

Security Measures

PayPal offers their users security and stability, which they are expanding to the mobile wallet industry. With PayPal's global customer base and many people having PayPal accounts, phishing scams are plentiful. One of them involves receiving an email which requires users to enter their PayPal information, upon so doing, they have given access to their account (and link bank accounts and credit cards) to scammers. Users should never give their PayPal account information as a response to an email. PayPal's customer service is helpful and live help is available 24 hours per day so that users may report or confirm any information which does not seem accurate or originating from PayPal.

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The Bad

Few Mobile Wallet options
Limited locations
Customer complaints

Few Mobile Wallet Options

PayPal holds a solid market share in their online payment solutions as well as with their in-app purchase capability. However, at the time of this review, there are few real mobile wallet options for users to make everyday purchases without scanning their cards. The most significant drawbacks in using PayPal as a mobile wallet include:

PayPal has their own point-of-service terminals which limits the number of retailers which accept PayPal as a method of payment.
PayPal's POS terminals are not contactless and their app does not offer contactless options with any of the current technology available.
Using PayPal at a brick-and-mortar store is not convenient, nor straightforward and would require steps which are cumbersome to the payment process, slowing down the transaction significantly.

As has been shown with PayPal's business model and track record, the company is working towards developing an option to make contactless payments a reality with the recent acquisition of Paydiant. Paydiant will give Paypal access to QR-code payment terminals, the same process that retailer backed CurrentC is currently beta-testing in Columbus, OH and plans to expand to a nationwide market soon.

Limited Locations

While the number of physical stores you can pay with PayPal is growing, it currently is low when compared to other mobile wallets. PayPal is in the process of becoming compatible with QR-code POS terminals. The company looks to expand further into offering the customers the ability to pay using Near Field Communication capability. As is and at present, this app does not offer the option to have a fully digital wallet.

Customer Complaints

There are several complaints from users of the PayPal app which state that the app is prone to malfunctions, and that it slows down their device. Further bug fixes will be needed for this app to become more stable and user-friendly.

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The Bottom Line

While PayPal is an excellent payment application inside other apps and for making purchases online, it still has many features which need to be added before it truly becomes a mobile wallet app which is compatible with the POS terminals at most brick-and-mortar retailers. With recent acquisitions and a solid track record, the Review Team is confident in saying that PayPal is not far off from adding additional capabilities to their services. However, with the standardized criteria created for rating mobile wallet apps, PayPal falls short in their offering. The remain a recommended option for their current strength, but are not able to be fully endorsed by the Review Team because of their voids in features which comprise a comprehensive mobile payment app.

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