PayPal is an indispensable tool for contractors, freelancers and at-home business mavens who need a reliable means of transmitting and receiving funds. Millions of workers use the service on a regular basis to receive "paychecks" and per-job payments. Most eBay transactions are now funded through PayPal, which is a subsidiary of the online-auction powerhouse. PayPal generally enjoys impressive customer-satisfaction metrics and appears to occupy a secure position atop the growing online-payments industry.
At first glance, PayPal does appear to exclude one potential user group. To earn certain privileges and benefits, PayPal account holders must eventually "verify" their identities using a legitimate bank account. Individuals who lack open bank accounts often complain that they're unable to attain full PayPal "membership." While they can still withdraw funds from their accounts by requesting printed checks, this process can be time-consuming and involve added fees.
PayPal also limits the size of "unverified" users' withdrawals. These limits can be tight: Some users report being limited to withdrawals of just $500 per month. PayPal maintains these limits to discourage business owners from evading taxes or laundering money through the service.
If you need to verify your PayPal account without a working bank account, you have several options. First, you can open a new credit facility or purchase a prepaid debit card backed by a national electronic payment service. These cards typically have Visa or MasterCard logos displayed prominently on their front faces. While PayPal offers a proprietary credit card for its account holders, this product usually requires pre-approval. In other words, you'll need to submit a credit check to obtain a "PayPal Visa." If you have poor or nonexistent credit, you may not meet the company's minimum credit standards.
Approval standards for PayPal Buyer Credit, a service designed to enhance the purchasing power of regular users, may be slightly more relaxed. However, relatively few PayPal users receive approval for Buyer Credit without also receiving approval for the service's proprietary Visa card.
Fortunately, other credit and debt cards have laxer approval standards. Many national conglomerates, including Walmart and General Electric, now offer prepaid debit cards backed by Visa. Most locations that accept standard Visa credit cards also accept these prepaid products. Alternatively, many national banks and credit card companies offer "secured" credit cards tailored to high-risk borrowers. Be aware that you may have to put down a security deposit before you're approved for these types of cards.