2023 Paypal Business Review: Is It Right for You?

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 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 – $10.00 and below	$0	2.40% + 5 cents	1.50%
QR code – $10.01 and above	$0	1.90% + 10 cents	1.50%
Apple Pay	$0	2.59% + 49 cents	1.50%

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.

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.

Choose the type of PayPal account you would like to set up. (Source: PayPal)

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Fill out the basic information and review PayPal policies by clicking on the links provided. Once that is done, hit the “Agree and Create Account” button. (Source: PayPal)

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You will then be given temporary access to your PayPal business account where you can fill out a form to get your account verified. (Source: PayPal)

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The first section of the form will ask for your basic personal and business information. (Source: PayPal)

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It will then ask you for your business profile. Once you are done, hit the “Save and Continue” button to proceed to the next section. (Source: PayPal)

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If you choose “Individual/Sole Proprietor” as a business type, you will be asked to provide personal details such as your SSN, date of birth, and home address. For all other business types, an Employer ID is required. Click “Submit” and a verification email will be sent to your specified email address. (Source: PayPal)

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To verify your account, you need to (1) Verify your email address, (2) Add a bank account, and (3) Verify your bank account. (Source: PayPal)

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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.

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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

The button generator provides you with a pre-built code that you can paste on your product page without the need for a shopping cart.
Best for: Businesses that sell at a fixed quantity and price.
(Source: PayPal)

Standard Integration PayPal checkout allows you to include payment options exclusive to PayPal. Requires some coding knowledge to install.
Best for: Most businesses
(Source: PayPal)

PayPal checkout with advanced integration allows you to customize your payment fields on the webpage, as well as use PayPal’s fraud protection tools. Also requires coding knowledge to set up.
Best for: Businesses that want a fully customized checkout.
(Source: PayPal)

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.

You can accept credit or debit card payments by keying in your customer’s card details or connecting a card reader to your desktop. (Source: PayPal)

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.

Create PayPal estimates and convert them into invoices with a few clicks once your customers approve your proposal. (Source: PayPal)

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 will take you through a step-by-step process on creating subscription plans. (Source: PayPal)

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:

The dynamic messaging feature displays the most relevant Pay Later option for your customer.
(Source: PayPal)

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From there, the customer can select their preferred Pay Later option.
(Source: PayPal)

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Approval is instant and your customer gets clear information about the payment terms for their selected Pay Later option.
(Source: PayPal)

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Once the customer accepts the terms, you get paid immediately and PayPal will handle the collection of monthly installments.
(Source: PayPal)

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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. While there are no extra fees to include crypto in your checkout option, the usual fee for online transactions, which is 3.49% plus 49 cents per transaction, applies.

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

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.

You can also copy your payment link and send it out through email, blogs, and messaging apps. (Source: PayPal)

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.

There are no fees to set up a PayPal Business account and you can immediately start using your account to receive payments upon submission of the verification requirements. However, there are payment processing fees for every payment you receive, starting from 1.9% + 10 cents.

To open a PayPal Business account, you will need to prepare your full legal name, your email address, a password, your Social Security number (SSN) or tax ID, business description, and business bank account details.

PayPal Business is not a good fit for large-volume businesses because PayPal’s transaction fees are generally slightly higher than other payment processors. Its chargeback fees are also higher than most, and there is a high risk of account suspension. Other things users don’t like are its slow deposit speeds (for payouts outside of PayPal) and hard-to-reach customer support.

You need a PayPal Business account to be able to use PayPal’s merchant features. With a PayPal Business account, you cannot send payments to family and friends and use it for online purchases.