An online payment service that lets its users make purchases and receive payments via a user-defined email address.
PayPal serves a de facto middleman in online financial transactions. Paypal aims to speed up monetary exchanges and increase security at the same time by letting its consumers perform purchases without having to enter their credit card information each time. A Paypal-linked email address, typically the user’s personal email address, is used instead.
PayPal Inc. is known as the premier payment option for purchases in eBay, where it offers fraud protection, among other perks. Note, however, that PayPal is not a bank account in itself. Instead, it serves as a de facto escrow account, which lets a user deposit and withdraw money from a credit or debit card. Paypal, in this sense, serves as a financial firewall for an actual bank account.
see also: Ecommerce Tools
PayPal vs. Merchant Account: What’s the Difference?
Webmaster World (September 8, 2010)