PayPal Business Account Review
PayPal merchant services may not suit high-volume and high-risk businesses, but many sellers and customers will find PayPal easy and convenient.
PayPal At A Glance
- PayPal offers businesses a vast commerce ecosystem that combines payment processing with eCommerce and mobile point of sale functionality.
- Online sellers can use PayPal as their exclusive means of accepting payments or as a supplemental option. This isn’t possible with Square, Stripe, or any other processor.
- In many instances, online PayPal sellers will pay a fixed fee of $0.49 per transaction in addition to the percentage fee. This fixed fee is higher than that of PayPal’s competitors and hurts small-ticket merchants.
- Trusted by consumers
- Flat-rate pricing
- Multiple payment plans are available
- Interchange-plus pricing available for some merchants
- Good for low-volume merchants
- Extensive integrations
- Good developer tools
- All-in-one payments system
- Account stability issues
- Inconsistent customer support
- Not suitable for high-risk industries
- The high $0.49 fixed per-transaction fee hurts small-ticket merchants
Table of Contents
- What Is A PayPal Business Account?
- Countries Served By PayPal
- Supported Payment Types & Currency
- Accepting Online Payments With PayPal Merchant Services
- PayPal Business Account Fees & Rates
- PayPal Business Products & Services
- Funding Options For PayPal Business Account Users
- Contract Length & Cancellation Fee
- Sales & Advertising Transparency
- PayPal Customer Service & Support
- PayPal Integrations & Add-Ons
- PayPal For Business Reviews & Complaints
- How Do PayPal Merchant Services Compare To The Alternatives?
- Final Verdict: Is PayPal Right For Your Small Business?
- FAQs: PayPal Merchant Services
What Is A PayPal Business Account?
PayPal is universally known for its buy buttons and consumer digital wallet. However, for business users, the PayPal merchant services package offers robust tools that let you sell anywhere, anytime, and with no monthly fees for most basic services.
With numerous integrations on offer, you’ll have plenty of options for syncing PayPal with your current online store, accounting service, and/or shipping software. PayPal also provides its own mPOS app, PayPal Zettle.
PayPal’s all-in-one business suite stands out due to its lack of contracts and no early termination fees, making it a highly convenient tool for commerce. Sadly, PayPal’s $0.49 fixed fee for online transactions hurts its value for small-ticket merchants. However, PayPal’s extensive functionality means that you’ll want to keep reading our PayPal business account review for the full story.
If you like what you see, we can help you set up a PayPal business account.
Countries Served By PayPal
You can use a PayPal business account in over 200 countries and territories worldwide. That’s nearly all of them, so if you’re reading this, the odds are strong that you can process payments with PayPal. However, not all of PayPal’s services and features are available everywhere. For example, PayPal Payments Pro is only available in the US, Canada, and the UK.
Supported Payment Types & Currency
Let’s take a look at the different payment types and currencies PayPal accepts.
Accepting Online Payments With PayPal Merchant Services
Setting up your PayPal business account means choosing how you want to accept payments online. You’ll have to decide on the following:
- Whether you want Standard or Advanced Credit & Debit Card Payments
- Which of the three PayPal payment plans you want to sign up for
Regarding the former:
As for subscription plans, PayPal offers three options for web payments:
- PayPal Checkout (formerly Express Checkout)
- PayPal Payments Advanced
- PayPal Payments Pro
Let’s detail each of these three options.
For a visual reference detailing the three payment plans PayPal currently offers, see the following chart.
|Plan Name||Monthly Cost||Payment Buttons||Virtual Terminal||Hosted Checkout||Recurring Billing|
|PayPal Checkout||Free||Contextual (“Smart”) checkout buttons||Yes, for no additional monthly charge (Customer must have a PayPal account)|
|PayPal Payments Advanced||$5/month||Customizable payment buttons||Yes, for an additional $10/month|
|PayPal Payments Pro||$30/month||Customizable payment buttons||Yes, for an additional $10/month|
In addition to the above, PayPal offers a special payment plan for enterprise-level businesses called PayPal Enterprise. This plan gives you access to a full Braintree merchant account and offers an optimized processing engine to remove friction at checkout, a brandable web portal, granular data analysis, and more.
PayPal Business Account Fees & Rates
All PayPal core services come with no annual fee, no setup fee, no PCI compliance fees, and no cancellation fee. Except for a few optional software-related fees and advanced checkout options, you’ll only have to worry about payment processing costs.
PayPal’s pricing used to be very straightforward, even if those costs were a bit higher than most traditional merchant accounts. Unfortunately, the changes PayPal made to its pricing and feature offerings in 2021 make the job of explaining PayPal’s pricing considerably more difficult. I’ve outlined the current fees below, but you can also check out our guide to PayPal’s credit card processing fees. This article explains PayPal’s pricing structure in finer detail.
Overall, while PayPal’s new pricing scheme will result in many merchants — particularly those using PayPal Checkout as a means of accepting PayPal digital payments as a supplementary payment option — paying more in processing fees than they had previously, new merchants may find the lack of additional fees more cost-effective than an interchange-plus pricing plan (which sellers using Advanced credit/debit processing can now opt into).
PayPal’s transaction fees are as follows:
|Fee Name||Fee Amount|
|PayPal Digital Payments (PayPal Checkout, Pay With Venmo, PayPal Credit, Pay In 4, PayPal Pay With Rewards, & Checkout With Crypto) Sales||3.49% + $0.49 per transaction|
|Online Credit/Debit Sales (Standard Credit & Debit Card Payments)||2.99% + $0.49 per transaction|
|Online Credit/Debit Sales (Advanced Credit & Debit Card Payments)||2.59% + $0.49 per transaction|
|Online Credit/Debit Sales With The Payments Advanced Or Payments Pro Plans||2.89% + $0.49 per transaction|
|Online Credit/Debit Sales With Optional Interchange-Plus Pricing (Advanced Credit & Debit Card Payments Only)||Interchange + 0.49% + $0.39 per transaction|
|Chargeback Protection (Requires Advanced Credit & Debit Card Payments)||An additional 0.40% per transaction (0.60% per transaction if you get “Effortless” Chargeback Protection)|
|Swiped/Dipped/Tapped Mobile & In-Store Transactions||2.29% + $0.09 per transaction|
|Keyed-In Mobile & In-Store Transactions||3.49% + $0.09 per transaction|
|Virtual Terminal Transactions||3.09% + $0.49 per transaction|
|PayPal Payouts||2% (max $1) using the online form, $0.25 per payout using the API|
|Chargebacks||$20 per chargeback|
|International Transactions||1.5% cross-border fee|
|Refund Fee||No additional fees are charged to make the refund, but the fees you originally paid to receive the payment are not returned to you|
|Instant Transfer Fee||1.5% of the transfer amount|
Other PayPal Fees
PayPal sports a few more alternative rate offerings: a microtransactions plan, nonprofit discounts, and discounts for donations, more generally.
PayPal Monthly Fees
Remember that with PayPal Checkout, you’ll pay no monthly fees, but if you prefer to keep customers on your page, use customizable checkout buttons, and/or use a virtual terminal, you’ll need either PayPal Payments Advanced or Payments Pro:
- Paypal Payments Advanced: $5 per month
- Paypal Payments Pro: $30 per month
PayPal Payments Advanced and Pro don’t include an option for Recurring Billing. If you want to offer subscription services, that will run you an extra $10 per month on top of the Pro plan. PayPal offers free recurring billing for PayPal Checkout users but not PayPal Advanced/Pro users.
Furthermore, if you want a virtual terminal, one is included with the Payments Pro package. If you’d rather not use Payments Pro and just use the virtual terminal on a standalone basis, you can do that, but the virtual terminal will cost you $30/month — same cost as the full Payments Pro package.
PayPal’s Payflow Gateway
Finally, PayPal offers its Payflow gateway on a standalone basis to process payments. It works with most payment processors. If you want to sell online but don’t want to use PayPal as your primary payment processor and your chosen processor doesn’t offer a gateway, Payflow is an option. Payflow supports two gateway plans:
PayPal Business Products & Services
|Dynamic Currency Conversion|
|Recurring Billing & Subscriptions|
|Native POS & Card Reader|
|Appointments & Reservations|
Before we delve into the full range of PayPal products, know that PayPal is a third-party processor (also known as a payment service provider (PSP) or an aggregator).
The main difference between a third-party processor and a traditional merchant account provider is that instead of giving merchants their own merchant account, PSPs aggregate all their merchants into one enormous merchant account. One unfortunate side effect of this arrangement is that merchants bear an increased risk of account instability. Holds and terminations are all too common due to the risk management policies required for PSPs to function.
On the plus side, the underwriting process for getting approved for an account is much less thorough than it is with a merchant account provider, so you’ll be able to start accepting payments more quickly and with less information required.
Our PayPal vs. merchant accounts analysis examines the whole scope of the differences between these two divergent payment processing methods.
PayPal Tools For Small Business
PayPal offers a huge number of business services under its payments umbrella. Here’s what PayPal provides for businesses beyond payment processing.
Funding Options For PayPal Business Account Users
Money from PayPal transactions is available almost immediately in your PayPal account. You can then spend that balance anywhere that accepts PayPal online or transfer the funds to your bank account. Standard transfers typically take one to two business days and are cost-free.
If you need your funds within minutes, PayPal offers an instant transfer option. It will cost you 1.5% of the transfer volume, which is on par with what Square charges for the same service.
Whether you’re doing a standard transfer or an instant transfer, your debit transfer limits are as follows:
- $50,000 per transaction
- $100,000 per day
- $250,000 per week
- $500,000 per month
If you’re transferring funds to your bank account, there is a $25,000 per-transaction withdrawal limit.
Contract Length & Cancellation Fee
PayPal merchant services are contract-free and have no early termination fee. Though this is standard with PSPs like Square and PayPal, we love to see this from merchant services providers.
The pay-as-you-go model is ideal if PayPal is your starter option, as you always have the option of upgrading to a merchant account later. However, if the rates work for you (particularly as just a secondary option), PayPal will also scale with your business.
Sales & Advertising Transparency
Thankfully, PayPal is quite upfront with its sales and advertising. PayPal’s business rates — numerous as they are — are listed in plain sight, so there’s no hidden agenda. PayPal has gotten better about disclosing pricing and fees, such as its chargeback fee, which used to be hidden in the fine print.
However, don’t think that everyone can process with PayPal just because anyone can open an account. It’s just not true, and I think it plays a big role in complaints against PayPal. There’s a specific list of PayPal-prohibited businesses, which I encourage every prospective PayPal business account user to check out. You’ll also be under scrutiny as soon as you start processing. If PayPal decides you present an unacceptable risk, it will terminate your account.
Check out our guide on how to prevent holds, freezes, and terminations.
PayPal Customer Service & Support
|Dedicated Support Representative|
|Knowledge Base or Help Center|
|Videos & Tutorials|
PayPal has many different customer service channels. Depending on your question or problem, any of these options may resolve the issues you might have:
- Community Forum: If you want insights and advice from other PayPal merchants, the community forum is a good place to start.
- Knowledgebase: PayPal’s self-help resources are pretty extensive, both for consumer users as well as merchants. You’ll find a vast array of questions and answers in the searchable database, which should cover most of your needs.
- Phone/Email: Any PayPal customer service review must note that PayPal’s phone support is quite inconsistent (see Negative PayPal Reviews & Complaints). Sometimes you’ll get a rep who knows what they’re doing; other times, you won’t. Personally, when I tested the phone support, I had to wait a while for a callback, but I did ultimately receive helpful support. However, my advice is to avoid calling if possible. Between the knowledgebase, community forum, and quick answers sections, you should be able to find answers to the most common problems.
- Social Media: PayPal is active on Facebook, but if you want help on social media, you’re better off using Twitter/X. Send a tweet/whatever to PayPal and you should get some assistance.
- Resolution Center: Through PayPal’s resolution center, you can communicate directly with a buyer to resolve a transaction problem. You can also use it to report unauthorized account activity, resolve an account limitation, and ask PayPal to investigate a transaction issue.
One compelling benefit of using PayPal is the sheer volume of users. Whenever you encounter an error or a problem, Google it, and the odds will be good that you’ll find a solution from another merchant who has already dealt with the same issue. However, when it comes to account issues such as funding holds, you’ll need to talk to someone over the phone.
If necessary, you can go through the BBB (read more about that in the PayPal For Business Reviews & Complaints section).
PayPal Integrations & Add-Ons
PayPal integrates with a vast number of software platforms, from online store builders to accounting applications, shipping tools, and email marketing software. There are just way too many to write out, but here’s a quick primer on the options available:
There’s a clear benefit to having so many integration options: You won’t have to worry about whether your shopping cart is compatible or not because it most likely is. The same goes for major accounting applications. Plus, there’s no shortage of well-known, robust POS solutions for retail stores and restaurants. PayPal also integrates with some more specialized solutions as well.
PayPal For Business Reviews & Complaints
How Do PayPal Merchant Services Compare To The Alternatives?
There are many alternatives to PayPal competing for your business. Let’s see how PayPal measures up against three of the best payment processors in the industry: Square, Stripe, and Helcim.
Final Verdict: Is PayPal Right For Your Small Business?
PayPal is a strong payment option for new businesses, and you should definitely consider it as a backup form of payment if you sell online. Of course, it functions quite well as your primary payment option as well. Setting up a PayPal business account is quick and painless; the platform is easy to use, it’s widely accepted, and consumers trust the brand name.
If you own a brand new business and need to accept payments quickly, PayPal is a good solution.
That said, as your business grows and you exceed $10K in monthly revenue, it may be more worthwhile to pursue a traditional merchant account because the processing costs will be lower, plus you’ll enjoy more account stability. Have a look at our merchant account comparison chart if you’re considering going this route.
Unfortunately, while PayPal is at its most useful when you’re a smaller online merchant just starting out or you only sell occasionally, the high $0.49 fixed per-transaction fee has the most impact on precisely these sellers, which is the primary reason we’ve given PayPal a score of just 3.5 out of 5 stars.
FAQs: PayPal Merchant Services
We've done in-depth research on each and confidently recommend them.
We've done in-depth research on each and confidently recommend them.