Setting up a business PayPal account can enable you to take payments for products and services without the need to pay for a pricey merchant account. But while many people know how to set up a personal PayPal account, not as many are as familiar with how to create a business PayPal account. Here’s our step-by-step guide to help you.
What is a PayPal business account?
A PayPal business account is simply an account used by businesses to send and receive payments. It can be used to process payments online and in person and you can link it up with your business bank account to transfer your money.
PayPal business accounts come with a range of tools and features to help you set up online payment buttons or electronic shopping carts. Customers don’t need to have a PayPal account to pay you as your business account can accept a range of payment types online.
As well as online payments, you can also take payments on the go and in person with a Zettle card reader (part of the PayPal family) and your smartphone, which will enable you to process card and contactless payments and track sales.
Alternatively, customers can pay by scanning a QR code using the PayPal app, or you can get paid by email by creating and sending invoices through your business account. The invoice is sent straight to your customer’s email inbox and they can then pay you online using their credit card or debit card or PayPal.
Additionally, it’s possible to get paid by phone through Virtual Terminal. All you need is internet access and your smartphone, computer or tablet turns into a credit card terminal. You can also get paid through social media by creating a PayPal.Me link.
Does my business need a PayPal account?
Although you don’t have to have a business PayPal account, there are many benefits to opening one. As well as making it easier for you to accept payments from customers, it enables you to trade under your business name.
A business PayPal account can be a particularly good option for businesses that want to accept payments online, such as an ecommerce store, as you’ll be able to integrate PayPal into your checkout. This means customers can pay the way they want to without leaving your website.
Setting up a PayPal business account is free and you can cancel your account at any time. However, be aware that you will have to pay transaction fees every time a customer pays you for goods or services. These vary depending on the payment method as the table below shows.
|Alternative payment method (APM)||1.2% + fixed fee (30p for GBP payments)|
|Card funded from a user without PayPal account||1.2% + fixed fee (30p for GBP payments)|
|QR code transactions (£10.01 and over)||1.5% + fixed fee (10p for GBP payments)|
|QR code transactions (£10 and below)||2% + fixed fee (5p for GBP payments)|
|All other commercial transactions||2.9% + fixed fee (30p for GBP payments)|
Note that the fixed fee will depend on the currency you’re being paid in – we’ve used GBP payments in the above examples. You can see a full list of fees on the PayPal website.
Can I use a personal PayPal account for my business?
Yes, it is possible to use a personal PayPal account for your business but it’s not always the best idea.
For a start, customers will be able to see your personal name, rather than your business name, which can make you appear less professional. There’s also a fee for accepting credit and debit cards online, and the features available are far more limited compared to a business PayPal account. Keeping your personal and business accounts separate is also much better for tax purposes.
How do I set up a PayPal business account?
If you’re ready to set up a PayPal business account, follow the steps below:
Go direct to PayPal
First of all, you’ll need to head to the PayPal website and click “sign up”. Then enter your business email address, create a password and click through.
Complete the form
Next, you’ll need to fill out a form, providing some basic information about your business, including the account holder’s name, the business name and address and a business phone number. You will then be asked to fill in a few additional details about your business and you’ll need to add some personal information such as your date of birth, nationality and home address.
When you’ve filled in the relevant information, click through to submit the form.
Verify your account via email
Within a few minutes, PayPal will send a confirmation link to your registered email address. You’ll then need to click through to verify it.
Log into PayPal and finalise your account details
Once you have verified your email address, you’ll be able to log in to your new PayPal account with your username/email address and password. At this point you will need to provide your bank account information – this can be a personal bank account if you don’t have a business account. You’ll be asked for the name of your bank and the account number. A verification request will then be sent to your bank and it usually takes three to five days to complete this process.
Once this has been completed, you can finish setting up your account. You’ll be asked to choose your preferred business payment method and be able to set up other business-related features such as requesting a debit Mastercard or setting up an online shopping system.