PayPal is a common payment processor that people use to purchase products and services. It enables the user to give a vendor their email address, instead of credit card information, to complete payment. But PayPal is also used by businesses and vendors themselves to collect and process payments from their customers.

While a basic free PayPal account can be used to do this to some extent, there are additional tools and options available with a PayPal Business account. We’ve gathered all the info in one place so you can decide if this is a good option for you.

What is a PayPal business account?

A PayPal Business account allows you to do things you can’t do with a regular PayPal account, like accepting PayPal at your physical storefront, or with a mobile card reader. Here are the most prominent features of this type of PayPal account.

Accept Payments

With a PayPal business account you can accept payments from customers in lots of different ways:

On your own website or app

• Offer PayPal as an option to your checkout
• Accept credit cards
• Create a custom checkout
• Integrate with other apps

At your store or in person

• Chip, swipe, or contactless cards
• Mobile card reader
• Point-of-sale payments

Over the phone or by email

• Email invoices and include a custom payment link
• Use Virtual Terminal to accept payments over the phone

Invoicing

Customize and send invoices to your customers from anywhere you’ve got an internet connection. Send invoices for free and only pay when when your customers pay you. Features of PayPal invoicing include:

• Accept partial payments
• Send reminders for unpaid balances
• Invoice scheduling
• Saved invoice templates and items
• Complete invoice history
• Recurring invoices (with a premium account)

When you create an invoice for your customer, you’ll send them an email with a link to the invoice. They can then pay it using PayPal or a credit card, and PayPal will let you know when the money arrives in your account.

See more specifics in our PayPal Invoicing article.

ZipBooks gives you the option of letting your customers pay their invoices with PayPal, quickly and easily. Set up a free account to see how it works!

PayPal Business App

Use the PayPal Business App to do what you need to do, no matter where you are. Send, track, and manage invoices; transfer funds; view account details; and store customer and vendor contact info. Integrate with PayPal Here (a mobile card reader application) to accept credit cards right on your smartphone or tablet.

Integrate with other applications

When you’re building a business, there are lots of different components that need to work together in order for you to succeed. With a PayPal business account, you can find and integrate solutions that go hand-in-hand.

For example, if you need to set up a website to sell your products, PayPal works seamlessly with apps like Wix and Big Commerce. If you want to join and sell in an online marketplace, you can integrate with ebay and Swappa, and the PayPal tools will be set up automatically in your account. Use PayPal with ZipBooks to accept payments, track sales and keep your bookkeeping up to date.

Loans and credit solutions

PayPal offers a couple of different credit solutions, depending on the situation. Whether you’re a customer and you need to pay in installments, or a business looking for a loan, PayPal has a few options.

PayPal Credit

Encourage your customers to buy more items, and spend more money on your website or at your store by offering PayPal Credit. Customers can pay for their purchases in monthly installments, and pay no interest if they pay off their balances in six months (for purchases over $99).

Use PayPal’s banners and buttons to promote, and when your customers choose that payment option, PayPal will take care of the billing with no additional cost to you. You’ll get paid the full amount of the purchase up front.

Business Loans

If you need a little money to get your business off the ground or to support a new offering until it takes off, you can apply for a PayPal Business Loan, or for PayPal Working Capital.

• The Business Loan offers loans from $5,000 to $500,000 to businesses with annual revenue of at least $42,000 and least 9 months business history. Competitively-priced fees, automatic weekly payments from your bank account, and possible approval within one day.
• PayPal Working Capital is for businesses that have had a PayPal Business account for at least 90 days, and have processed at least $15,000 in payments using PayPal in the past year. Loans are from $1,000 to $125,000 and there is no credit check involved. Your flat fee is determined by the amount you borrow, and the repayment options you choose. Approval takes only minutes, once you qualify.

PayPal Business Debit Mastercard

This is exactly what it sounds like: a PayPal debit card. Instead of drawing funds from your bank account, it draws from your PayPal balance when you make a purchase. You can use it anywhere Mastercard is accepted, and you can earn 1% cash back on purchases, once you activate this feature. You can even withdraw money from your PayPal balance at any ATM that’s compatible with Mastercard.

How much does a PayPal Business account cost?

A basic account is free to set up, but there are certain fees associated with a PayPal Business account and the different tools available.

Payment Processing Fees

Online Payment Fees

If you’re selling products and services online with PayPal Payments Standard or Express Checkout:

In the U.S: 2.9% of the transaction amount + $0.30 per transaction

Outside the U.S: 4.4% of the transaction amount + a fee based on currency

• If you’re selling in a physical location, the fees are 2.7% and 4.2% respectively, + fixed fee based on currency.
• If you’re a charitable organization, 2.2%, and 3.7% + fixed fee.
• For micropayments (transactions less than $10), 5.0% and 6.5% + fixed fee.

Mobile Card Reader Fees

If you’re accepting payments on your phone or tablet:

• Swiped and check-in transactions: 2.7% of the transaction amount
• Keyed or scanned in transactions: 3.5% of the transaction amount + $0.15
• International cards: 2.7% + 1.5% cross-border fee and/or 2.5% currency conversion

PayPal Payments Pro and Virtual Terminal

For a $30 monthly fee you can get a customized checkout, without leaving your website (for credit card payments). You can host and design your checkout page on your own, so it looks and works the way you want it to. PayPal Payments Pro also includes Virtual Terminal so you can take orders over the phone. Virtual Terminal lets you accept credit card payments anywhere you have a computer. If you’re using the service separately from PayPal Payments Pro, it’s $30/month.

Additional Services

Add recurring billing capabilities to your invoicing for $10/month, and get advanced fraud protection services for your account for $10/month + $.05 per transaction.

There you have it! We hope this has been a helpful tool in determining if PayPal is the right solution for your payment processing needs. At ZipBooks we want you to have all the tools you need to conduct and grow a successful business. If you’re looking for an all-in-one accounting, bookkeeping, reporting, and invoicing solution, try a free ZipBooks account. We’d be happy to welcome you into our family!