PayPal is an e-commerce business allowing payments and money transfers to be made through the Internet. Online money transfers serve as electronic alternatives to traditional paper methods such as checks and money orders.

A PayPal account can be funded with an electronic debit from a bank account or by a credit card. The recipient of a PayPal transfer can either request a check from PayPal, establish their own PayPal deposit account or request a transfer to their bank account.

PayPal performs payment processing for online vendors, auction sites, and other commercial users, for which it charges a fee. It may also charge a fee for receiving money, proportional to the amount received. The fees depend on the currency used, the payment option used, the country of the sender, the country of the recipient, the amount sent and the recipient's account type.[2] In addition, eBay purchases made by credit card through PayPal may incur extra fees if the buyer and seller use different currencies.

As a member, you can

1. Send payment to or receive payment from another member. Payments are instant and both parties will receive a confirmation email for proof of payment.

2. Send payment to a non-member. They will receive an email informing them that they have received money through Paypal and that they must complete the free registration process to claim their funds.

3. Make payments for products or services online. Once a member places an order on the merchant's website, you will be transferred to the Paypal secure server to complete the order process. Payments are instant and both parties will receive a confirmation email for proof of payment.

You can fund and withdraw from Paypal through e-currency exchangers.
For the best Paypal exchange service I recommend is Epaymansion. It is a cheap, quick and efficient service offering exchange services for Liberty reserve, Alertpay, Paypal etc.