Popmoney vs. PayPal

Cost, Security, and Features

Mobile money transfer
••• Getty Images/yuoak

Popmoney and PayPal are both tools for sending money to another person—but which is better? Each service provides electronic transfers with the following benefits:

  1. You don’t need to deal with cash or get exact change.
  2. There’s no need to write checks and reorder more when you run out.
  3. You receive an electronic record of transactions, helping you remember (and prove) how much you paid, to whom, and when.

But Popmoney and PayPal serve different needs. We’ll make a full comparison below, but as an overview:

  • Popmoney works well as a person-to-person (P2P) payment service with people you know and trust.
  • PayPal can handle P2P payments, and it’s also useful for retail shopping, buying online, and paying strangers around the world.

Besides those two popular services, there are several other ways to send money to people. For example, Zelle is a relatively new option, compared to PayPal and Popmoney. It’s typically free, and your bank account might already have Zelle enabled.

Fees at Popmoney vs. PayPal

Fees are modest with Popmoney and PayPal. The cost is typically worth it when you consider postage, the cost of checks, and the value of your time. Still, you should know what you’re paying and whether or not the expenses make sense. If you make frequent, small payments, watch out for per-payment fees that can add up.

PayPal overview:

  • PayPal is typically free for personal payments as long as you draw from your bank account (as opposed to funding with a debit or credit card).
  • PayPal should be free for payments you make to a business (when you shop online or at a brick-and-mortar merchant).
  • PayPal charges fees when your business receives payments from customers.

Popmoney overview:

  • Popmoney is usually free when receiving money.
  • Your bank may charge a small fee for sending money via Popmoney ($1 or so per payment).
  • Sending money from your account at Popmoney.com costs $0.95.
  • Requesting money from somebody through Popmoney.com costs $0.95. But receiving funds is free as long as the other person initiates the transaction and you don’t request money.

Naturally, additional fees may apply in specific circumstances. For example, PayPal charges a fee to businesses when customers reverse a payment. If you’re concerned about costs, read the fee disclosures for each service carefully. And if you hate fees and just want to send money to friends and family, check into Venmo, Square Cash, and Zelle as alternatives.


Pretty much anybody with a bank account can use PayPal or Popmoney. That’s one more reason to open a bank account if you don’t already have one.

Initially, sending money with Popmoney was only available to customers at participating banks. Now, anybody can sign up and create a profile at Popmoney.com using payments account at any bank. Checking, money market, and other transaction accounts work with Popmoney, whether sending or receiving money. Savings accounts do not work because federal regulations make savings accounts unsuitable for payments or frequent withdrawals. You can also send money from a debit card account.

Popmoney advantage: If your bank partners with Popmoney, the process is almost effortless—you don’t need to set up a profile or enter bank information at Popmoney.com. Instead, just log in to online banking and use Popmoney from there. If your bank doesn’t use Popmoney, there’s a good chance it uses Zelle, instead.

PayPal advantage: Not everybody uses a bank or credit union that partners with Popmoney, but PayPal accounts are widespread. Your friends might not want to set up a new account at Popmoney if they already use PayPal or other P2P services.

Which is Best for Shopping?

If you plan to use your account for online shopping (or with select brick-and-mortar stores like Home Depot), PayPal is the better option. Retailers and online merchants often offer PayPal as a payment method.

In some cases, it’s wise to pay with PayPal. When buying from a website that you’re not familiar with, it’s scary—and risky—to provide your credit or debit card number. With PayPal, you keep those numbers hidden, and the vendor only sees your username or email address and your delivery address.

Which Is Safer?

Both Popmoney and PayPal use state-of-the-art security to keep your money and personal information safe. That said, data breaches can happen anywhere, so it’s wise to keep track of your accounts and report suspicious activity as soon as possible.

When buying from a merchant—or a stranger on the internet—PayPal has “buyer protection” for certain transactions. That’s helpful if there’s a dispute with the seller or your goods never arrive.

Popmoney does not offer buyer protection, and thieves have used the service to take advantage of people (who send money and get nothing). Don’t send funds via Popmoney unless you know exactly where the money is going and you trust the recipient to deliver (the same goes for Venmo).

Funding Methods

Popmoney only pulls funds from bank “transaction” accounts like checking and money market accounts. You can also link a debit card, which typically pulls funds from a checking account or money market.

PayPal can link to your bank account as well as credit cards and debit cards. You can also spend from your PayPal balance (if you keep money in PayPal), and there are several ways to add to your PayPal balance. For example, you can use money that others pay to your account, or you can deposit cash at certain retail stores.