PayPal Business Account: Everything You Need to Know

April 18, 2023

PayPal payments
EL Mehdi
PayPal Business Account: Everything You Need to Know

More than 30 million online merchants use PayPal on Shopify stores.

You may already have a PayPal account and use it to make online purchases or transfer money to friends and family. However, if you're selling products on your ecommerce store, setting up a dedicated PayPal Business account might be the easiest way to accept payments. 

A PayPal Business account allows you to do more than just accept payments; it also gives you access to tools that will help you run and grow your business. 

This blog includes all the information you need around PayPal Business accounts so you can make an informed decision. 

What is a PayPal Business Account?

PayPal is a well-known and trusted online payment service provider. It has about 400 million active users all across the world. Accepting and processing payments is simple with a PayPal Business account for small and midsize enterprises.

The best part about PayPal is that customers can easily check out and make payments. They are not required to create a PayPal account and can pay using a debit card, credit card, or PayPal credit.

PayPal Business accounts are accessible in over 202 countries/regions and support 25 different currencies.

PayPal Personal Vs. PayPal Business

PayPal personal and PayPal Business are two separate accounts that serve different purposes.

You can use a PayPal Personal account to get paid online or make payments for personal reasons. But the PayPal Business account is for merchants or enterprises selling goods or services since it offers added features.

PayPal Business is similar to PayPal personal; however, as a small and medium enterprise, you get access to additional features like sending and receiving invoices, allowing subscription payments, etc.

You can use your company website as an e-commerce platform with PayPal Business. Customers will find it easier to make purchases online with this added feature.

Furthermore, PayPal personal offers customers limited payment options, but you allow customers to pay however they want with PayPal Business.

You may earn perks such as PayPal credit or loans if you use a PayPal Business account. When you're in a tight spot, this will come in handy.

To know more about the difference between PayPal Business and PayPal personal accounts, read this article

Who needs a PayPal Business account?

We hope you understand the difference between a PayPal personal account and a PayPal Business account. But how do you know if you need a PayPal Business account or if you should just use your personal account?

Well, if you fall into one of the following categories while running an ecommerce storefront, you should definitely open a PayPal Business account:

1. Freelancers and Sole Proprietors 

You may have heard that one must choose a PayPal Business account only if you run a registered business under a separate name or if you've set up an LLC. But even if you're a freelancer or sole owner, there are many reasons why you should register a PayPal Business account.

Most freelancers struggle to get paid on time. A PayPal Business account can help expedite payments for freelancers by allowing clients to pay via all payment modes, such as debit or credit card. Having a PayPal Business account also allows companies to simply incorporate PayPal into their payment system, making it easier to keep track of sales, revenues, and costs.

2. Moonlighters and side hustle

Keeping track of your accounts might be challenging when you're using your free time to earn additional money or starting a company while still working a traditional 9-5 job.

You probably don't have time to separate personal and company transactions to evaluate earnings and costs. As a result, having a PayPal Business account might be beneficial. Create a second PayPal Business account without paying any upfront or monthly fees. It can save you hours of time and effort to put towards other aspects of your side business.

3. Vendors on eBay and Etsy

eBay, a well-known e-commerce site, offers a payment tool to receive payments straight into your account. However, if you don't want to miss out on the 37% of consumers who prefer to pay using PayPal and want an easy and faster payment alternative, you should get a PayPal Business account. Although a PayPal Business account is not required to sell on eBay, it can make the payment process seamless.

Similarly, if you sell on Etsy, PayPal is a convenient way to receive money. If you don't see the option you're looking for, you can always change your payment settings to accept PayPal payments. 

BONUS: If you have integrated both eBay and Etsy to your Shopify store for leveraging the online marketplaces and selling websites, it’s a further win to use PayPal Business accounts. 

4. Small Business and Startups with LLC

51% of customers trust businesses that offer PayPal as a payment option. If you’re a small business startup with an LLC looking to extend the customer base and deliver more marketing value it’s time to consider opening a PayPal Business account. 

A PayPal Business account is much more than a payment method for small businesses. They can get paid 10x faster by using a PayPal Business account to provide clients with a clickable payment link. They can effortlessly connect PayPal to several markets and sell on various platforms. Businesses may now use PayPal Business accounts to add a payment option to their website and securely take payments.

5. Corporations 

You may add users, make multiple logins, and give employees access to execute tasks for you when you create a PayPal Business account. You may offer up to 200 employees access to your PayPal Business account, each with their own login ID and password.

Your PayPal Business account also comes with seller protection, which helps you safeguard your online sales, reduce claims and chargebacks, and avoid merchant fraud.

6. Non-Profit Organizations

PayPal is a less expensive, faster, and more reliable payment processing platform. As a result, numerous non-profit organizations use it for charitable fundraising. If you're a non-profit organization, a PayPal Business account makes accepting foreign payments simple and quick. You may effortlessly send funds to your organization's bank account from there.

Charity transaction rates are subject to application and pre-approval by PayPal. These rates will apply to certain transactions received in your PayPal account once PayPal has authorized them. When you accept foreign charity and donations, you will be charged a fee for receiving domestic charity transactions and a percentage-based fee for international charity transactions.

Note: The current domestic charity transaction charge is 1.99% +fixed fee. In addition, there is a 1.50% charge for international charitable transactions. 

PayPal Business Account Requirements 

If your company fits into one of the categories listed above, you're certainly excited to know more about setting up a PayPal Business account. 

Let's go over the requirements for a PayPal Business account:

It is recommended that you create a separate business account before setting up a PayPal Business account. Although you can use your personal account, having two separate accounts - one for personal use and the other for business use - has several advantages. 

You can quickly keep track of payments, calculate business costs, file taxes, and forecast your company's growth.

After you've created a personal and business PayPal account, the next step is to set up a PayPal Business account. It usually just takes a few minutes. 

You'll be asked for your email address, contact information, and the bank account where you'd want the money to be deposited when you create a PayPal Business account. You must also specify a company name that will appear on the customer invoice.

You'll also have to select if your company is a single proprietorship, a partnership, a corporation, a non-profit organization, or a government entity. Depending on the type of business you choose, you may be asked to provide additional information such as product or service keywords, monthly sales, website, and an employer identification number.

Finally, you must provide information about customer care so that consumers may contact you in the event of a claim or dispute.

Note: PayPal Business account has very few requirements and no initial costs. Additionally, there is no limit on money or sales volume required to open an account.

PayPal Business Account Fees 

If you're thinking about opening a PayPal Business account, you're probably wondering if there's a cost involved. Opening a PayPal Business account is free at first, and there are no monthly fees. There are also no cancellation costs. Using a normal PayPal Business account can save you money and provide more flexibility.

If you want to provide your customers with a more personalized online checkout experience, you may upgrade to a PayPal Pro account. PayPal Pro has no setup or cancellation costs, but it does charge a $30 monthly fee plus a per-transaction fee. PayPal Pro is an option accessible to merchants in the UK, US and Canada.

For example, if you offer products or services in the US and accept online payments using PayPal, the rates for online transactions are 2.9%+ $0.30 USD (fixed fee amount) and 2.7% + no fixed fee amount for in-store transactions.

Transaction fees apply only when you sell products or services and take payments online or in person. You must pay regular transaction fees, calculated as a percentage of the entire transaction amount plus fixed fee of the currency for each nation.

When you sell overseas online or in person, the percentage of the normal transaction amount increases significantly, and the fixed fee amount based on the local currency still applies to your total fees.

To calculate the fixed fee amount for your total transaction fees when selling products/services and accepting payments abroad check this page

How to Setup a PayPal Business Account?

We hope you're ready to accept online payments with a PayPal Business account. If so, the following steps will help you in getting started quickly:

Step 1:The first step is to sign in to PayPal with your email address. To get started, click "Sign Up" if you don't already have an account with PayPal. It is entirely free to create a PayPal personal or business account.

Step 2: After you sign up, you'll be prompted to choose the sort of account you wish to create. Click Next after selecting Business Account.

Step 3: You'll be prompted to enter your preferred email address on the next screen. Click Next after entering the email address.

Step 4: Next type in the password. Make sure your password contains eight characters, including one number and one symbol.

Step 5: After you've created an account, you'll see a page that reads, "Tell us about your business." Here you must include information about your company, such as its name and address.

You'll be asked to agree to an E-communication Delivery Policy, a User Agreement, and a Privacy Statement. Check the box and click Agree and Create an account after reading these documents and are ready to move forward.

Step 6: You'll be asked to select the type of business in the next step. You can choose from a dropdown menu. Additional information, such as product or service keywords, monthly sales, website, and employer identification number, may be requested depending on the company type.

Based on your information, you may be asked if you want a PayPal Business Debit Mastercard, which allows you to access money in your PayPal account in the same way you would a regular bank account.

This card has no yearly fee once you've received at least $250 in payments. Every month, you may use your card balance anyplace that has a Mastercard logo and get 1% cashback on selected transactions.

If you wish to get this account offer, check the box, or uncheck it if you don't, and then click Continue.

Step 7: To create an account, you'll need to provide some personal information, such as the last four digits of your social security number, your birth date, and your home address. PayPal keeps your information private and does not share it with third-party apps. Once you've provided all of your personal information, click Submit.

Step 8: Once you've entered your information, your PayPal Business account is ready to use. It will now redirect you to a page where you may choose from various account options.

You'll be able to request or transfer money, send an invoice, set up recurring payments for your business, and take payments online using PayPal Checkout.

Congratulations on setting up a PayPal Business Account!

How to Upgrade or Downgrade PayPal Business Account?

After creating one, you may realize that you need to upgrade or downgrade your PayPal Business account. You probably want to upgrade your PayPal Business Account to provide your customers with a more personalized and unique shopping and checkout experience.

While upgrading your PayPal Business account is simple, downgrading your account may take longer since the procedure must be performed manually.

Upgrading to a PayPal Business account

You can upgrade your personal PayPal account to a PayPal Business account rather than opening two separate accounts. To upgrade to a PayPal Business account, follow these steps.

Step 1: From the login page, select Sign Up, then Business Account from the drop-down menu, then Next. After you've logged in your personal account, you'll be asked if you want to change your current personal account to a business account. After making your selection, click Next. To switch to a business account, use your current email address.

Step 2: You'll be prompted to fill out your company information and agree to the terms and conditions on the next page.

Step 3: After that, follow the procedures outlined in the section under "How to Set Up a PayPal Business Account."

There are two alternatives for upgrading your PayPal account: Standard Account and Pro Account.

A standard PayPal account is completely free. All major credit and debit cards are accepted.This account does not have any monthly fees.

A PayPal Pro account has a monthly cost of $30. PayPal Pro has all of the features of a standard account and the opportunity to customize your customers' checkout experience and integrate with your existing shopping cart.

Downgrading a PayPal Business account

There is no automated option to downgrade a business account to a personal account; you must contact customer support to have this done. For contact options for your country, go on support/contact at the bottom left of any Paypal page.

How to delete and close a PayPal Business Account?

You might consider deleting or closing your PayPal Business account under special circumstances. Some of the reasons are listed below:

  • Your account has been hacked and must be disabled to safeguard your personal information.
  • You've closed your business and won't be using the account anymore.
  • You wish to use a different business account or register a new account with a different email address.

You may delete and close your account in a few simple steps for any reason.

Step 1: Logging into your PayPal Business account and transferring any remaining money to your bank account is the first step. A $1.50 processing fee will be applied if you request a check.

Step 2: After that, save any data you wish to save. For example, you may download your transaction history from the Activity tab or your financial statements and summaries from the Reports tab. You won't be able to access this information if you delete and shut your account. Make a backup of everything you don't want to lose.

Step 3: After you've sent any remaining funds to your bank and downloaded the data you wish to save, select Account Settings from the dropdown menu by clicking the gear icon in the far right-hand corner.

Step 4: There are three choices under the Account & Security menu on the left-hand side of the Account Settings page. Select Account Preferences.

Step 5: Click the Close account option towards the bottom, where it reads Account type. You'll be directed to a page that notifies you that canceling your account is final and that all your history will be lost if you click this link. Click Continue if you agree to these conditions.

Step 6: Finally, you'll be prompted to give up to three reasons for canceling your account. Click Continue once you've made your choices and added any comments.

Step 7: PayPal will prompt you to confirm that you're canceling your business account one last time. If you're sure this is what you want, click Confirm, and your business account will be canceled and closed permanently. You won't be able to access it anymore.

Step 8: You should receive a confirmation email from PayPal within the next 24 hours stating that your account has been permanently deleted and closed.

How to use TrackiPal to get PayPal payments faster?

Maybe you'll set up your PayPal Business account now that you've read our comprehensive guide to getting started. Customers can pay how they want from almost anywhere in the world using PayPal. You also have access to various tools that you may use to expand your business.

However, to accept PayPal Shopify payments as a merchant, you must provide order tracking information on PayPal. Your payments can be placed on hold if you don't do this. Because you must manually enter information, most merchants find this intimidating. Imagine entering order information for thousands of orders on your Shopify store. 

TrackiPal is the ultimate solution for saving time and effort by automatically syncing order tracking information to your PayPal account. Just download the TrackiPal app and link it to your PayPal account to get started. TrackiPal is shopify paypal tracking app who accept paypal shopify payments that allows them to:

  • Lower rolling reserve in PayPal and get paid 10x faster
  • Save time and energy with automatic sync in real-time
  • Monitor live status with a clear dashboard
  • Avoid chargebacks and disputes

Over 5000 Shopify stores use Trackipal to maximize the potential of their PayPal Business account. So, what exactly are you waiting for? Get a free 3-day trial by downloading the app today.