Paypal Business Review: Is It Right for You?

When to Use PayPal

• For a quick and easy way to accept payments online
• For international payment processing
• For nonprofit payment processing

When to Use an Alternative

• If you have an existing merchant account and only need a standalone payment gateway
• If you need a virtual terminal without extra fees
• If you are a high-risk merchant
• For retail shops processing more than $5,000 in-person sales

Commercial Transaction Rates

PayPal’s commercial transaction rates apply to any goods, services, or any type of commercial transaction. These rates are the standard rates for receiving domestic transactions.

Applied When: Accepting payments where customers use various PayPal Checkout options—including Pay Later, Pay with Rewards, Crypto, and Venmo—and alternative payment methods (APM) such as Apple Pay.

	Monthly Fees	Local Transaction Rates	Add-on for International Transactions
Standard Debit/Credit Card Payments	$0	2.99% + 49 cents	1.50%
PayPal Checkout/Guest Checkout	$0	3.49% + 49 cents	1.50%
Invoicing	$0	3.49% + 49 cents	1.50%
Venmo	$0	3.49% + 49 cents	1.50%
QR code	$0	2.29% + 9 cents	1.50%
Apple Pay	$0	2.59% + 49 cents	1.50%
Cryptocurrency conversion	$0	1%	N/A

PayPal Online Card Payment Services

A PayPal Business account lets you accept debit or credit card payments for your products or services. PayPal Payments Pro is PayPal’s fully customizable payment system that can be integrated with popular online shopping carts, while Payments Advanced allows you to receive payments via a PayPal-hosted page.

Applied When: Accepting payments where customers key in their credit and debit card details on a PayPal checkout service.

	Monthly Fee	Local Transaction Rates	Add-on Fee for International Transactions
Advanced Debit and Credit Card Payments	$0	2.59% + 49 cents	1.50%
Payments Pro	$30	2.89% + 49 cents	None
Virtual Terminal	$30	3.09% + 49 cents	None
Payments Advanced	$5	2.89% + 49 cents	None

Payflow Pro (Payment Gateway)

Payflow Pro is PayPal’s payment gateway for merchants who want to use a different payment processor. If you want to stay within PayPal’s ecosystem, you also have the option to use PayPal’s processor, Payments Pro. Although merchants can still use PayPal’s hosted checkout pages, Payflow allows merchants to host their own checkout pages and send transactions via an API.

Applied When: Accepting payments through a templated (Payflow Link) or customized (Payflow Pro) checkout page.

PayPal Zettle

PayPal Zettle is PayPal’s point-of-sale (POS) system. There are no additional fees to use the POS software but you will need to purchase one of PayPal Zettle’s hardware to receive card payments. You only incur fees for every transaction using the POS system.

Applied When: Accepting in-person transactions through PayPal Zettle.

	Monthly Fee	Local Transaction Rates	Add-on Fee for International Transactions	Monthly Processing Volume Limit
Card present	$0	2.29% + 9 cents	None	None
Keyed-in		3.49% + 9 cents	None
QR code		2.29% + 9 cents	None
Invoicing		3.49% + 9 cents	None

Donation & Nonprofits

Payments are categorized as a “donation” when the payment is sent via the “Donate Button”, the PayPal Checkout for Donations, and PayPal Fundraisers. Any other transactions through other means are not considered donations and will be charged the regular processing fees.

Applied When: Accepting donations as a business (donation) or as a PayPal-approved charitable organization (nonprofit).

	As a Business	As a Nonprofit
Monthly Fee	$0	$0
Donate Button	2.89% + 49 cents	N/A
PayPal Fundraisers (Listed Fundraisers)	2.99%	N/A
PayPal Fundraisers (Unlisted Fundraisers)	No Free	N/A
PayPal Checkout for Donations	2.89% + 49 cents	N/A
Charity Transactions	N/A	1.99% + 49 cents
International Payments	+1.5%	+1.5%

Micropayments

Businesses that process payments below $10 can apply for micropayment rates. The rates are applied to all commercial transactions and start at 4.99% + 9 cents per local transaction and an additional 1.50% for international transactions.

Other Fees

• Chargeback fees: $20 for transactions not processed through a buyer’s PayPal account or through guest checkout.
• Dispute fees: $15 Standard or $30 for high-volume transactions.
• E-check fees: 3.49% capped at $300
• Instant withdrawal of funds to linked card or bank account: 1.50% of the amount transferred
• Recurring billing service: $10/month optional service available for PayPal Online Card Payment Service and Payment Gateway users
• Recurring payment tool: $30/month optional service available for PayPal Online Card Payment Service users

Merchants that require an in-person payment solution through PayPal can sign up for PayPal Zettle. Features include a proprietary mobile card reader and other hardware to support its built-in point-of-sale app.

Terminal

PayPal Zettle Terminal is an all-in-one standalone terminal. The Zettle POS app is built-in and it comes with an activated sim card. It can process payments using major debit and credit cards, PayPal, Venmo, payment links, QR codes, and contactless payments like Apple Pay and Google Pay.

Terminal only: $199
Terminal with built-in barcode scanner: $239
Terminal with printer and dock: starts at $269

Purchase PayPal Zettle Terminal

Card Reader

The PayPal Zettle Card Reader 2 is designed to be paired with the Zettle POS app on your smartphone or tablet. It connects to your device via Bluetooth and accepts card and contactless payments.

Card reader only: $29 for the first reader, $79 each for additional readers
Dock: $29

Purchase PayPal Zettle Card Reader 2

Store Kit and Accessories

PayPal offers a full store kit to get your business up and running. Designed to be used with the PayPal Zettle Reader 2, these accessories are optional purchases to complete your store POS system.

Portable Printer: $269
Barcode scanner: $229
Zettle Stand 360 (designed to hold an Apple iPad): $159

Purchase PayPal Zettle Store Kit

Read our PayPal Zettle review.

PayPal has a simple and straightforward application and setup process, especially compared to other payment processing options. All you have to do is sign up, connect your business account, and start accepting payments.

PayPal’s user agreement is provided on the website while signing up for a PayPal account. It includes standard terms and conditions you would find on a merchant account aggregator, such as disclosure of personal information, service level agreements, restrictions, and terms for opening, verifying, and closing your account.

Some terms and conditions to note are:

• While not yet verified, you can begin accepting payments on your PayPal account—however, in the event that your account, for some reason, could not be verified, your PayPal balance can only be withdrawn by transferring the amount to your linked bank account. (You can also request for a check to be sent, subject to a $1.50 fee.)
• You may hold funds in a different currency, but you will have to request for the amount to be converted into dollars in order to withdraw. This will be subject to PayPal’s currency conversion fee.
• Accepting e-checks will take 3–5 business days for approval.
• A high-volume dispute fee will be imposed if transaction disputes reach 1.5% or you had more than 100 disputed sales transactions in the past three months.
• “Fund Hold” will be at the sole discretion of PayPal and based on its risk decisions. This usually happens when an account is new, your business is considered high-risk, or when you have received a high number of disputes.

In the event that your account reaches certain processing limits or begins to add certain business activities, PayPal will require you to enter a “Commercial Entity Agreement” as stipulated by the card networks. The Commercial Entity Agreements will then be applied to succeeding payments you process through PayPal.

The PayPal checkout provides you with simple tools to integrate with your product, cart, and payment pages. This way, you give customers a variety of PayPal payment options that are secure, flexible, and well-trusted by many, increasing chances of conversion. Choose an integration format that presents the most relevant payment type to your customers, depending on your business needs.

Button Generator

Standard Integration

Advanced Integration

PayPal also offers a virtual terminal solution when you sign up for a PayPal Payments Pro service. This feature allows you to accept in-person or over-the-phone payments anywhere with an internet connection and a browser. Note, however, that you will be charged a monthly fee of $30 to use this platform.

Create and customize digital invoices with PayPal’s invoicing tools for small businesses. You can access this feature on any device, customize your templates to fit every customer, and send the invoice through email or with a shareable link. You can also track unpaid invoices and send reminders from any device via your PayPal Business App.

PayPal allows you to create scheduled or recurring invoices that can be delivered automatically at regular intervals. Subscription tools enable you to design flexible subscription plans, such as fixed or quantity pricing, add discounted trial periods, and manage your subscriptions from a central dashboard. You also get real-time reports and updates from the dashboard.

PayPal has partnered with a number of brands to offer PayPal Pay Later plans. This customer financing exclusive gives your customers the option between paying in four interest-free installments or with PayPal Credit, both appearing on your PayPal checkout page. What’s great about this setup is that you also get paid upfront while your customers pay later.

Here’s how:

Point-of-Sale

In 2018, PayPal acquired European POS software Zettle and began offering its features to US-based businesses in July of 2021 as an eventual replacement for PayPal Here which was discontinued last September 30, 2023. This gives PayPal the ability to process in-person payments in brick-and-mortar locations using tablets or on-the-go with mobile card readers attached to a smartphone.

For more information on PayPal’s mobile, in-person payment option, read our PayPal Zettle review.

QR Codes

PayPal lets you create a unique QR code for your business, so you can take in-person payments quickly and securely. Share your QR code with your customers through your PayPal app or have it printed and placed strategically around your store or even on your products. You can even add a tipping option in the app.

PayPal allows you to include a “Checkout with Crypto” as a payment method. When a customer chooses to pay in cryptocurrency, their crypto assets will be converted to fiat currency and credited to your account. The usual fee for online transactions (3.49% plus 49 cents) applies plus an additional spread (fee) of 1%..

PayPal is included in our list of the best crypto payment gateways for small businesses.

Dispute Resolution

PayPal assists its users in resolving disputes over payment transactions with its own set of management tools. It provides you with a messaging and notification function, along with the ability to upload supporting documents and a platform for appealing a resolution against your favor. It is important to note, however, that your funds are put indefinitely on hold until the dispute is resolved.

Seller Protection

PayPal offers a seller protection program against claims and chargebacks for its business account holders. It will not charge your PayPal balance for “Items not received” or “Unauthorized transactions” raised by your customers through PayPal—as long as your physical goods are sold and shipped with proof of delivery, or your intangible goods are supported with evidence of delivery or order fulfillment.

Chargeback Protection

PayPal Business accounts enrolled in Advanced Credit and Debit Card Payments are provided with chargeback protection. PayPal assumes liability for your eligible debit and credit card transactions and will reimburse you for the chargeback fee and purchase amount, if the transaction is deemed fraudulent or a customer claims that they did not receive your item. Take note the Chargeback Protection incurs an additional fee of 0.4% to 0.6% per transaction.

Connect PayPal Business to Facebook and Instagram and make your offerings available for purchase to social media users. PayPal hosts your listings, so you can create and share this on social media using a shareable link, without the need for an ecommerce platform.

Go to the “Sell on Social Dashboard” page to add your product details, including shipping and tax rates, then click the create button to produce a payment link. The next step will give you the option to click on the Facebook or Twitter icons to share your product listing automatically.

PayPal is now more than just sending and receiving card payments. It also includes a range of tools for managing your day-to-day business operations.

• Taxes: You can set up PayPal to calculate taxes for every transaction. It can also track the payment volume of your business account and send a Form 1099-K to its user if it crosses the IRS thresholds in a given calendar year.
• Small Business Financing: Merchants in need of extra capital can get a small business loan directly from PayPal. It works with WebBank to offer fixed-term loans, payable in weekly installments. Anyone interested can visit PayPal’s website and click on the “Check Eligibility” button, which takes you to a 5–10 minute online questionnaire. You can also customize loan terms and loan amounts. Once your application is approved, funds are transferred directly into your PayPal Business account as early as the next business day.
• Reporting and Analytics: PayPal’s reporting and analytics feature provides useful shopping insights to help improve your sales and plan your marketing strategy. It gives you a list of reports, from a history log to sales insights and details on disputes and chargebacks.
• Shipping Label Tools: PayPal partners with UPS and USPS, which also gets you discounts on their daily shipping rates. And because it’s integrated with PayPal, you can purchase and print shipping labels and track your packages from PayPal.

PayPal Business will make received funds available instantly in your PayPal Business account. Withdrawing funds from your PayPal account to your linked bank account and credit card is free and usually takes three to five business days. Instant withdrawals are also available for a 1.5% fee of your withdrawn amount and have a minimum fee of 50 cents. The maximum withdrawal per transaction to a bank account is $25,000, while the table below shows the withdrawal limit for cards.

PayPal uses tools such as a two-sided network, a machine learning engine that monitors card transactions on your website, and analytics to stay up-to-date with existing fraud and evolving cyber threats that can compromise your account. This toolkit is available for PayPal Business account holders with integrated advanced debit and credit card payments.

PayPal offers extended business hours for live customer and technical support. Its phone support is available 6 a.m. Pacific time to 6 p.m. PT, Monday through Sunday.

It also provides an extensive knowledge base which includes step-by-step guides, troubleshooting, and developer documentation.