Set up a PayPal account and link your bank details

To accept payments through PayPal, you need a PayPal account connected to a bank account or debit card where money can land. Start by going to paypal.com and clicking "Sign Up." You'll choose between a Personal account (for individuals receiving occasional payments) or a Business account (if you're selling goods or services regularly). A Business account gives you access to invoicing tools and payment buttons that Personal accounts don't have.

After creating your account, PayPal will ask you to confirm your email address and add a bank account or debit card. This is where PayPal deposits money when someone pays you. You can add this information during signup or later in your account settings under "Wallet." PayPal will verify your bank account by depositing two small amounts (usually under $1 each) and asking you to confirm those amounts—this takes a few business days.

Once your bank account is verified, you're ready to receive payments. PayPal holds funds in your PayPal balance first, then you can transfer them to your bank account whenever you want. Transfers to a linked bank account are free and typically arrive within one to two business days.

Key Takeaways

  • You need a PayPal account linked to a bank account or debit card; Business accounts offer more payment tools than Personal accounts.
  • PayPal verifies your bank account by depositing two small test amounts and asking you to confirm them, which takes a few business days.
  • Money lands in your PayPal balance first, then you transfer it to your bank account for free, usually within one to two business days.
  • You can accept payments through a payment link, invoice, or payment button without paying a fee to set them up—you only pay a transaction fee when money actually arrives.
  • PayPal's standard transaction fee is 2.99% plus $0.30 per payment for most sellers, though rates vary by account type and payment method.

Choose how you want to receive payments

PayPal offers several ways for people to send you money, and which one you use depends on your situation. The simplest is a payment link—a unique URL you can share via email, text, or social media. Anyone who clicks it can pay you without needing a PayPal account themselves. To create one, log into PayPal, go to "Tools," and select "Create a payment link." You enter the amount (or leave it blank so the payer chooses), add a description, and PayPal generates a link you can copy and share.

If you're billing specific people for services or goods, use invoicing. Go to "Tools" and select "Create an invoice." You'll enter the customer's email, itemize what they're paying for, set a due date, and send it. The invoice includes a "Pay Now" button they click to complete the payment. Invoicing is useful for freelancers, contractors, and small business owners because it creates a record and lets you track which invoices have been paid.

For businesses with websites, PayPal offers payment buttons and checkout integration. These let customers pay directly on your site without leaving to go to PayPal. Setting this up requires copying code into your website or using a website builder that has PayPal built in (like Shopify, Wix, or Square Online). If you don't have a website, payment links and invoices are your main options.

Understand PayPal's transaction fees

PayPal charges a fee each time someone pays you, and the amount depends on how the payment is made and what type of account you have. For a standard Business account receiving payments from customers in the United States, the fee is 2.99% of the payment plus $0.30. This means if someone sends you $100, you receive $96.71 after the fee.

If someone sends you money as a personal transfer (using PayPal's "Send Money" feature and marking it as "friends and family"), there is no fee—but this only works if both people are in the same country and the sender uses their PayPal balance or linked bank account, not a credit card. If the sender uses a credit card for a friends-and-family transfer, PayPal charges them a fee, not you.

International payments have higher fees. If you receive money from outside the United States, PayPal charges the standard 2.99% plus $0.30, plus an additional 4.99% currency conversion fee if the money arrives in a currency different from your account's primary currency. Some payment methods also carry different rates—for example, payments via PayPal Credit or certain digital wallets may have slightly higher fees.

There are no setup fees, monthly fees, or charges just for having a PayPal account. You only pay when money actually arrives.

Withdraw money from your PayPal balance to your bank account

Money you receive sits in your PayPal balance until you transfer it out. To move it to your bank account, log into PayPal, go to "Wallet," and select "Transfer Money." Choose "Transfer to your bank," enter the amount you want to move, and confirm. The transfer is free and usually arrives within one to two business days, though it can take up to three to five business days depending on your bank.

You can also set up automatic transfers so money moves to your bank account on a schedule you choose—daily, weekly, or monthly. This is useful if you receive payments regularly and don't want to manually transfer each time. Go to "Settings," select "Transfer Preferences," and choose your schedule.

If you need money faster, PayPal offers Instant Transfer to a debit card for a fee of $0.25 per transfer. The money arrives within 30 minutes. This is not available for transfers to bank accounts, only debit cards.

Protect yourself from fraud and disputes

When someone pays you through PayPal, the transaction is protected by PayPal's Seller Protection policy if you meet certain conditions. For goods, you must ship to the address the buyer provided in their PayPal account and get tracking confirmation. For services, keep records of what you delivered and when. If a buyer later claims they didn't receive the item or that the transaction was unauthorized, PayPal can investigate and side with you if your documentation is solid.

However, Seller Protection does not cover all situations. If a buyer pays you using a stolen credit card or hacked PayPal account, PayPal may reverse the payment after the fraud is discovered—sometimes weeks later. This means money can leave your account even after you've already transferred it to your bank. To reduce this risk, be cautious of unusually large payments from new customers, especially if they're paying for high-value items.

Keep records of every transaction: invoices, receipts, shipping confirmations, and any communication with the buyer. If a dispute arises, you'll need to provide this documentation to PayPal. Disputes must be resolved within 180 days of the payment date.

Handle refunds and deal with payment problems

If you need to refund a customer, go to "Activity," find the transaction, and click "Refund." You can refund the full amount or a partial amount. The refund goes back to the customer's original payment method (their PayPal account, credit card, or bank account, depending on how they paid). The refund is free, but if you originally paid a transaction fee on that payment, PayPal does not return the fee to you.

If a payment fails—for example, the customer's bank declines it or their PayPal account has insufficient funds—PayPal will notify both of you. The customer can retry the payment, or they can try a different payment method. You won't receive the money until the payment goes through successfully.

If a customer disputes a payment after it's completed, PayPal will contact you and ask for evidence that the transaction was legitimate. This might be a receipt, invoice, shipping confirmation, or email correspondence. Respond to disputes quickly—you typically have 10 days to provide your evidence. If you don't respond or if PayPal finds the evidence insufficient, the payment may be reversed and the money returned to the customer.

Frequently Asked Questions

Do I need a business license to accept payments on PayPal?

No. You can accept payments on a Personal or Business PayPal account without a business license. However, if you're regularly selling goods or services, PayPal may ask you to upgrade to a Business account or provide tax information. Check your local laws—some places require a business license if you're operating a business, but that's a legal requirement separate from PayPal's rules.

Can someone pay me on PayPal without having a PayPal account?

Yes. If you send them a payment link, they can click it and pay with a credit card, debit card, or bank account without creating a PayPal account. They'll enter their payment information on a PayPal-hosted page, but they don't need to sign up. Invoices work the same way—the recipient clicks "Pay Now" and can pay without an account.

What happens if I receive a payment and then my bank account is closed?

Money will stay in your PayPal balance. You can link a different bank account or debit card and transfer the money there. If you don't link a new account, the money remains in PayPal and you can use it to make purchases or send money to others, but you won't be able to withdraw it to a bank account until you add one.

How long does it take to receive money after someone pays me?

The payment arrives in your PayPal balance instantly or within a few minutes. Transferring that money from PayPal to your bank account takes one to two business days normally, or up to five business days in some cases. If you use Instant Transfer to a debit card, it arrives within 30 minutes but costs $0.25.

Can I accept payments in currencies other than US dollars?

Yes. PayPal can receive payments in over 100 currencies. The money will be converted to your account's primary currency, and PayPal charges a currency conversion fee of 4.99% on top of the standard transaction fee. You can also keep money in the original currency in a separate PayPal wallet if you prefer, though this is mainly useful if you regularly receive payments in that currency.