The basic concept is that someone sends an email requesting to buy an item. The seller approves the sale. The buyer then goes to PayPal and makes a secure transfer of funds.

An email letter arrives in the seller's box with the text "You've Got Money!" It's a take off on the AOL "You've Got Mail!" Get it?

The email provides a link. The seller clicks to check to make sure the correct amount of money has been transferred from one account to another. If all is on the up and up, the seller can download the payment onto a credit card, into a bank account, or request a check. The transaction is finished and the product is sent.

Furthermore, the PayPal process is not just for e-business. Let's say I owe you $20 from dinner last night or I picked the Browns over the Steelers and lost. If we're both PayPal clients, I can pay you for dinner or pay off that bet. (Although I don't know that PayPal would be too happy if they knew people were paying off illegal bets).

A transfer, is a transfer, is a transfer be it e-commerce or just two friends making things even-Steven.

Depending on whom you talk to, it's either the greatest thing on earth or the dumbest way to transfer money (nicknamed "beaming"). The basic concept is this; PayPal offers a secure service through which funds can be transferred from one PayPal account to another.

(Technically no funds are actually transferred. PayPal is just a running total of how much one account was given from another and vice versa. It isn't until someone "cashes out" that money is actually "moved".)

The transfer is immediate and guaranteed. PayPal won't transfer funds unless the buyer has a credit line (or amount in bank account) to make the transfer. No, PayPal is not a bank. Thus, their accounts are not federally insured in the same way as a traditional bank account, however they do offer their own private insurance. As of the time of this writing, the insurance was provided through the Travelers Group.

The fact that the money is transferred from one PayPal account to another, rather than right to the user, is important. We'll get to why in a moment.

In order to participate in PayPal, you must sign up to be a member. Right now (April, 2001) it's free. In fact, it remains a free service as long as you remain only a buyer, meaning money only moves from your account to someone else's account or you request from your own monetary sources.

In order to sign up, you are asked all the basic questions, plus you choose the traditional login and password. Your email is proven active by the computer sending you your confirmation number. You get the number, return to the site, and finish the process.

After signing up, you are asked to enter either a credit card number or bank account. Either way you go, or even if you choose to allow both, the computer system performs a check. If the accounts are active and have sufficient funds, you're good to go.

You'll be one of over 7 million beaming money from account to account.