Whether you're looking to turn your hobby into a legitimate business or you're looking to expand and grow your business as an experienced vendor, you need solutions to find out how to get paid quickly, seamlessly and affordably for the most critical operational issues. Then PayPal Business Account is your solution.
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Online payment processing, in particular, is particularly important. More than half of Americans now pay their bills online. And in early 2019, sales from online stores surpassed brick-and-mortar stores for the first time.
The good news is that just as e-commerce has revolutionized the way people buy and sell goods and services, it has forever changed the way people conduct online business, with new solutions making accepting and processing payments easier and more seamless than ever.
PayPal is one of the pioneers in the space. Chances are, you've already used online payment providers to make purchases in the past few years.
However, what you may not know is that the company launched a merchant services arm in the early 2000s that not only empowers business owners of all sizes to get paid quickly and easily, but also helps companies large and small to grow and scale.
Related:
How do you open your PayPal account?
What is PayPal and how does it work?
What is a PayPal Business Account?
PayPal is one of the world's most well-known online payment service providers (PSPs). A PayPal business account makes it quick and easy for businesses just getting started to accept and process credit card payments, debit card payments and more in over 25 currencies and from over 200 countries.
Like competitors Square and Stripe, PayPal only handles a small percentage of transactions made using their platform.
It's easy for your customers to check out and make purchases with a PayPal business account. This does not require them to have a PayPal account of their own (they can make their purchases as a guest), and they can choose to pay online or in person via both methods:
- Credit card
- Debit card
- PayPal
- Venmo
- PayPal Credit
Following are the credit cards accepted by PayPal Business Account:
- visa
- MasterCard
- American Express
- discover
- JCB
- Diner's Club
Debit cards accepted by PayPal business accounts are:
- visa
- MasterCard
Private label cards and procurement cards are not accepted, as are department store cards. Debit cards that are not Visa or MasterCard and require a numeric password are also not accepted.
Thanks to PayPal's history - it was acquired by eBay in its early days - it is generally considered one of the most powerful PSP solutions for e-commerce businesses. It integrates with hundreds of commerce platforms, including specialized online marketplaces like eBay and Swappa as well as custom online stores like WooCommerce and Magento.
And for those on-the-go or brick-and-mortar sellers who still primarily accept payments in person, a PayPal business account is offered by PayPal, which provides business owners with a mobile app and an assortment of card readers.
Beyond just solving the core operational problem of making payments, however, a PayPal business account helps business owners manage and scale their companies.
PSP has expanded the services they offer over the years from launch kits for newbies to shipping assistance for those looking to deliver products, lending options for seniors looking to expand their career opportunities and even reporting for those who want to. . It makes it easier to better understand where they are succeeding and where they have room for improvement.
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What are the types of PayPal business accounts?
A PayPal business account offers two major payment processing options for business owners:
1. PayPal Payment Standards
This basic PayPal business account requires no monthly maintenance fees and allows account holders to accept all PayPal payment methods (except payments made by phone, fax or virtual terminal). It also includes standard PayPal business account benefits like toll-free phone support and simplified PCI compliance functionality.
PayPal Payment Standard is ideal for business owners who are just starting out as well as those who are more happy with a no-frills checkout option on their website or through their e-commerce platform provider. Customers are directed to PayPal's site to complete payment and then return to the merchant's site.
2. PayPal Payment Pro
A step up from its standard counterpart, PayPal Payments Pro includes all the features of a basic account, including the ability to accept payments via phone, fax or virtual terminal.
This account gives business owners full control over their checkout pages, making it ideal for those who really want to take their e-commerce site to the next level. Customers never leave the business site when making a payment.
Unlike standard PayPal payments, this option requires a $30 monthly maintenance fee.
Additional PayPal Business Account Merchant Services
A PayPal business account includes a suite of services beyond payment processing. Some of these are included in the accounts described above, such as invoicing and eligibility for a PayPal debit card, but other features require an additional application process or development work.
1. PayPal Checkout:
n short, PayPal Checkout adds smart payment buttons to your e-commerce site that allow users to pay for your products and services with one click, bypassing a tedious ordering process that involves long, complicated forms. PayPal then provides you with the customer's contact information and shipping address if appropriate.
According to PayPal, PayPal checkout accounts for 82 percent more conversions (those who actually complete the checkout process). To add PayPal checkout, you'll either need to use one of the many e-commerce platforms that already integrate with it, or you'll need to work with a developer to implement it on your site.
2. PayPal Business Loans and Working Capital:
Cash flow is one of the primary issues a growing business faces. Along with PayPal business loans and working capital, PSP makes it relatively easy for companies with a PayPal business account to get the funding they need to expand.
Both options give qualified applicants quick access to cash, sometimes as soon as business days after approval, and both have lower barriers to entry than many formal lenders, such as banks, which require a lot of paperwork and credit checks.
The primary difference between the two is that PayPal Business Loans provide loans between $5,000 and $500,000, and PayPal Working Capital provides loans between $1,000 and $300,000.
To qualify for a PayPal business loan, you must pass a credit check and your business must be at least nine months old and generate at least $42,000 in revenue. You can set repayment terms at a fixed rate as long as they are between 13 and 52 weeks.
PayPal Working Capital does not require a credit check or minimum income; However, you must be an existing PayPal customer who has had a PayPal business account for at least 90 days and processed $15,000+ with PayPal within the last year. This option gives you access to up to 35 percent of your PayPal sales. You can pay off the loan by deducting a percentage of your PayPal sales.
3. PayPal Marketing Solutions:
PayPal Marketing Solutions is broken into the offering, as are the complimentary invoicing, shipping and debit card options that come with PayPal Payments Standard and Pro accounts.
This valuable suite of features includes insights into how often your customers shop, how much they spend, and how they interact with your checkout experience. To enable this service, all you need to do is copy and paste a snippet of code into your website.
There are 7 benefits of a PayPal business account you should know
1. No monthly maintenance payments are required
One of the best benefits of a PayPal business account is that the standard account comes with absolutely zero monthly maintenance charges. This means that there is no cost to sign up and start accessing all merchant services on offer
There are also no setup or cancellation fees. You'll only be charged when you actually start trading (see the chapter on PayPal business account fees), which means you can spend your time — and your extra cash — on other important business services.
2. Lightning fast setup
It takes as little as 15 minutes to get up and running with a PayPal business account. As the registration process is completely digital, you can go through quick and easy online steps wherever and whenever you want. There's no waiting in line at the bank, and you won't find yourself on the other end of a frustrating phone call that consists mostly of bad hold music.
3. Low barriers to entry
Unlike old-school merchant account providers that often come with complicated eligibility requirements and piles of paperwork, a PayPal business account only requires some basic contact information and general details about your company. Anyone can sign up - no credit check required. You only need to link a bank account to receive funds from your transactions.
4. Payments can be made online or in person, in the US and abroad
Another huge advantage is that a PayPal business account is flexible when it comes to accepting payments. Customers can pay with major debit and credit cards as well as PayPal, Venmo and PayPal Credit (they don't even need a PayPal account). What's more, people can shop online, in person or even through consignment. Finally, PayPal makes it possible to do business across borders and even language barriers – it's available in 25 currencies and 200 countries.
5. Easy e-commerce integration is possible
A PayPal business account syncs with hundreds of solution providers and shopping carts. Most major providers and even many smaller players have a simple option in their admin console where you can select PayPal integration and enter your login details and relevant credentials - it's that simple.
6. You can get cash back with a PayPal business account debit card
All those dead-end debit cards you've been making that don't actually give you any incentive to spend? Then you'll be happy to know about the PayPal Business Debit MasterCard, which comes complimentary with an account (you just need to request the card) and gives you 1 percent cash back on eligible purchases.
You can use the card to instantly access all the funds in your PayPal account without transferring anything to your business bank account, whether you're withdrawing from an ATM or making an in-store purchase (the card works anywhere that accepts MasterCard).
7. Discounts are available for non-profit and charitable organizations
PayPal Business Accounts also offer special, cheaper transaction rates for registered 501(c)(3) organizations. The company even has a ready-to-roll donate button that anyone raising funds can quickly and easily add to their website after creating a PayPal business account.
As a bonus, PayPal has worked to integrate with popular fundraising sites, such as FundRazr, to make it easy to activate their services and receive the money you need.
Why do I need a PayPal business account?
You may have heard stories of many casual sellers starting booming businesses over the years from their personal PayPal accounts. So it won't be surprising if you're wondering what the difference is between a PayPal personal account and a business account — and why a sole proprietor or small business owner should consider opening one or the other.
In short, PayPal's personal account is primarily designed for shopping and sending money. You need to provide contact information and a verifiable bank account. On the other hand, while you can receive funds from other PayPal users, you won't be able to accept many types of payments, or you won't be able to extend access to your account to employees or colleagues or take advantage of the business. Targeted services such as PayPal Checkout or PayPal Marketing Solutions.
Also, opening a separate PayPal business account will prevent you from mixing personal purchases with business expenses and personal financial gifts from business income. If you gamble on being able to track everything through your personal account and your side business suddenly shuts down, you'll spend hours sorting out personal transactions from business transactions at tax time, and the risk of making mistakes can be high.
Since phasing out its personal Premier accounts, PayPal's business account has become the smartest account option for even the smallest businesses, including freelancers and small-scale artisans. Almost anyone who plans to collect revenue or distribute money for business purposes will benefit from choosing a business account over a personal account.
From enhanced access to various payment options to customer support, analytics and tracking, the Business Account is designed to help your small business grow into a medium-sized business. And for a $30 monthly fee, PayPal Payments Pro is ready to help you grow with scalable features and services.
PayPal business account
A PayPal business account is used to send and receive payments for businesses.
It has many benefits, such as the ability to generate invoices, accept payments from customers online, and access higher limits on PayPal transactions.
A PayPal business account is best suited for small business owners who want to process payments quickly and easily.
PayPal personal account
A PayPal personal account is used for personal payments.
This type of account does not offer the same features as a PayPal business account, such as the ability to create invoices or accept payments from customers online.
However, a PayPal personal account comes with some benefits, such as the ability to withdraw money to your bank account and purchase items online.
A PayPal personal account is best suited for those who want to process personal payments quickly and easily.
PayPal Business vs Personal Account Fees
Advantages and Disadvantages of PayPal Business
The main pro of a PayPal business account is that you can accept payments as a business.
This means you get the tax benefits associated with a business and customers may be more likely to trust your organization if they see you have an officially registered business account.
Another pro is that there are no transaction fees for payments from other PayPal users in most countries.
However, receiving payments from people who don't have a PayPal account usually incurs a fee.
The disadvantages of having a PayPal business account include that you are limited in terms of what you can do with the money you receive.
For example, you can't use it to send money to friends and family members through a PayPal personal account.
You also cannot use it to make online purchases with a personal account.
Overall, whether a PayPal business account is right for you depends on your business needs.
If you want to accept payments from customers and don't need the extra features that come with a personal account, a PayPal business account may be the right choice for you.
But if you want more flexibility in how you use your money, opting for a personal account would be a better option.
PayPal Personal Advantages and Disadvantages
The advantages and disadvantages of a PayPal personal account are the same as a business account.
The main pro is that you can easily send money to friends and family members.
You also get the flexibility to receive money from other people (or businesses).
Disadvantages include having less control over your funds than you would with a business account, as well as not being able to accept payments from customers with an official registered business account.
Overall, whether a PayPal personal account is right for you depends on how much freedom you want when using your money.
If everyone needs some extra cash here and there but doesn't mind accepting payments from customers or organizations, then this could be the right choice for them.
PayPal Business Account Requirements
Advantages of a PayPal business account include relatively few requirements and the absence of up-front fees. There are no minimum capital or sales volume requirements, making this an achievable next step for sole proprietors or small businesses to expand their reach and increase their clients' payment options.
Getting Started: What You Need to Open a PayPal Business Account
If you don't have a separate bank account for your business, consider setting one up before you set up a PayPal business account.
You can use your personal account, but it's best to have at least two bank accounts — one personal and one for your business — as you begin your entrepreneurial endeavors on PayPal. This will make it easier to track payments and business expenses, complete your taxes, and measure the growth rate of your business.
Once you have both a personal and business bank account, you can sign up for a PayPal business account in a few easy steps.
As with a PayPal personal account, you will need to confirm your email address, provide contact information, and provide account information for the bank account to which you wish to deposit funds; A designated business banking account is recommended but not required.
You must provide a business name that will appear on the customer's invoice. And you'll be asked to describe your business type by selecting from a dropdown list:
- Individual/ Sole Proprietorship
- partnership
- Corporation
- Non-profit organization
- Government entity
Depending on your business type, you may be asked for additional information, such as product or service keywords, monthly sales, website and employer identification numbers. However, there are no wrong answers; You only need to provide information.
Finally, you'll need to provide customer service contact information, which for a sole proprietor can be you.
A personal and a standard, or first-tier, business account costs the same There are no startup or monthly fees and both have identical transaction fees.
Frequently Asked Questions About PayPal Business Accounts
Do you have to be a US citizen to open a PayPal business account?
Pursuant to the 2010 Foreign Account Tax Compliance Act (FATCA), users opening a business account may be required to provide tax documents and other verification information to prove that they are a US citizen or a non-US citizen who is paying taxes correctly. Money raised or acquired in the United States or from US citizens.
Additionally, to comply with FATCA, PayPal frequently reviews individual accounts, and when discrepancies are found, will request documentation of citizenship or legal US taxpayer status from account holders.
Is there a minimum income requirement to open a PayPal business account?
There is no minimum income or sales volume to open a business account. However, to qualify for PayPal Working Capital, you must have a business account up and running for 90 days and process at least $15,000 within a 12-month period.
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