Set up a PayPal account and link your bank details
To accept payments through PayPal, you need a PayPal Business or Premier account. If you only have a Personal account, you can upgrade it directly in your account settings, or create a new Business account at paypal.com. During setup, PayPal will ask for your legal name, business name (if applicable), address, and tax ID or Social Security number.
After your account is created, link your bank account so PayPal can deposit the money you receive. Go to your Wallet or Settings, select "Bank Accounts," and add your checking or savings account. PayPal will make two small test deposits to verify the account is yours—you'll see the amounts in your bank statement within a few days, and you'll need to confirm those amounts back in PayPal to complete the link.
You can also add a debit or credit card to your account for faster access to funds, though this is optional. Once your bank account is verified, you're ready to start receiving payments.
Key Takeaways
- You need a PayPal Business or Premier account to receive payments; Personal accounts cannot accept customer transactions.
- Link your bank account by confirming two small test deposits PayPal sends—this usually takes three to five business days.
- Money you receive lands in your PayPal balance first; you then transfer it to your bank account, which takes one to three business days depending on your bank.
- PayPal charges a fee for each transaction—the rate depends on whether you're selling goods, services, or invoicing, and whether the buyer is in the US or abroad.
- You can accept payments through a payment button on your website, a PayPal invoice, a QR code, or by sharing a payment link.
Choose how your customers will pay you
PayPal offers several ways for customers to send you money, and you can use one or more depending on your business. The most common methods are a payment button (embedded on your website), a PayPal invoice (sent via email), a payment link (shared through text, email, or social media), or a QR code (displayed in person or printed).
If you run an online store or sell from a website, a payment button is the standard choice. You create the button in your PayPal account, copy the code, and paste it into your website. When a customer clicks it, they're taken to PayPal to complete the purchase. If you invoice clients for services or one-off sales, send a PayPal invoice instead—the customer receives an email with a link to pay, and you can track whether they've opened it and paid.
For in-person sales, a QR code works well: customers scan it with their phone and pay instantly. Payment links are flexible and work anywhere—you can text a link to a customer, post it on social media, or include it in an email. All of these methods funnel money into the same PayPal account.
Understand PayPal's transaction fees
PayPal charges a fee on every transaction you receive. The fee structure varies by what you're selling and where your customer is located. For goods and services sold within the US, PayPal typically charges a percentage of the transaction plus a fixed amount per sale—the exact rate depends on your account type and sales volume. International transactions cost more. Invoices sent to US customers usually have a lower fee than goods sales.
You can see PayPal's current rates on their Pricing page, but the most accurate way to know your rate is to log into your account and check under Settings or Fees. The fee is deducted automatically when the payment arrives in your PayPal balance—you don't pay it separately. If you're invoicing a customer, you can choose to absorb the fee yourself or pass it to the customer by adding it to the invoice amount.
Some PayPal plans offer lower rates if you commit to a monthly subscription, though this only makes sense if you process a high volume of transactions. Compare your expected monthly sales against the subscription cost before signing up.
Send invoices and track payments
To invoice a customer through PayPal, log into your account, go to the Tools or Activity section, and select "Create an Invoice." Fill in the customer's email address, describe what you're charging for (product name, service description, or line items), enter the amount, and set a due date if you want one. You can add your logo, payment terms, and notes. When you send it, the customer receives an email with a link to pay.
PayPal tracks whether the invoice has been viewed and paid. You'll see a status update in your account—"Sent," "Viewed," "Paid," or "Overdue"—so you know where things stand without having to follow up by email. If the customer doesn't pay by the due date, you can send a reminder directly through PayPal, which re-sends the invoice link.
Invoices are useful for service providers, freelancers, and anyone billing for work after it's done. They create a paper trail and look professional to the customer.
Transfer money from PayPal to your bank account
When a customer pays you, the money lands in your PayPal balance, not your bank account. You then transfer it to your bank whenever you want. Go to your Wallet, select "Transfer Money," choose "Transfer to Your Bank," enter the amount, and confirm. The transfer usually takes one to three business days, depending on your bank.
You can set up automatic transfers so money moves to your bank on a schedule—daily, weekly, or monthly—without you having to request it each time. This is useful if you receive payments regularly and want a predictable flow of cash. Go to Settings, select "Transfers," and choose your automatic transfer schedule.
PayPal holds funds for a few reasons: if a transaction is disputed, if you're a new seller, or if PayPal flags unusual activity. In these cases, money may stay in your PayPal balance for a set period (often 21 days) before you can transfer it. You'll see a note in your account explaining why the hold is in place.
Handle refunds and disputes
If a customer asks for a refund, you can issue one directly from your PayPal account. Go to your Activity or Transaction History, find the payment, and select "Refund." The refund goes back to the customer's original payment method—their bank account, credit card, or PayPal balance—within a few business days. The transaction fee you paid is not refunded to you.
If a customer disputes a charge or files a claim with PayPal, you'll receive a notification. PayPal will ask you to provide evidence that the transaction was legitimate: a tracking number (for shipped goods), a delivery confirmation, a receipt, an email exchange, or a signed contract. Upload this evidence through your PayPal Resolution Center. PayPal reviews the case and decides in favor of either you or the customer.
To protect yourself, keep records of all transactions, communications with customers, and proof of delivery or completion. If you ship physical goods, use a tracked shipping method so you have proof the item arrived. For services, save emails or contracts showing what was agreed to and when the work was completed.
Secure your account and prevent fraud
Enable two-factor authentication on your PayPal account to prevent unauthorized access. Go to Settings, select "Security," and turn on two-step verification. PayPal will send you a code via text or email every time someone logs in from a new device—you'll need to enter that code to complete the login.
Monitor your account regularly for unauthorized transactions. Review your Activity or Transaction History weekly, especially if you process a lot of payments. If you see a charge you didn't authorize, report it to PayPal immediately through the Resolution Center. PayPal's Seller Protection covers you if a customer falsely claims they didn't receive goods or that a transaction was unauthorized, as long as you followed PayPal's requirements (like using tracked shipping for physical goods).
Be cautious of refund scams: a customer may claim they never received an item, you issue a refund, and then the item arrives anyway. Always require tracking and signature confirmation for high-value orders. For services, document the work you did and when it was completed so you have evidence if a dispute arises.
Frequently Asked Questions
How long does it take to receive money after a customer pays?
Money appears in your PayPal balance instantly or within minutes of the transaction. However, PayPal may hold the funds for 21 days if you're a new seller, if the transaction is flagged as high-risk, or if a dispute is filed. Once the hold period ends, you can transfer the money to your bank account, which takes one to three business days.
Can I accept credit card payments without a PayPal account?
No. PayPal is the payment processor, so customers must either have a PayPal account or pay with a debit or credit card through PayPal's system. You cannot accept cards directly without going through PayPal or another payment processor.
What happens if a customer disputes a payment?
PayPal opens a case and asks you to provide evidence the transaction was legitimate—tracking numbers, delivery confirmation, receipts, or contracts. If you have proof, PayPal usually rules in your favor. If you don't have proof, PayPal refunds the customer and the money comes out of your account.
Can I lower my PayPal fees?
PayPal's standard rates are set based on your account type and transaction type. You can lower your per-transaction rate by signing up for a monthly subscription plan if you process high volume, but this only saves money if your monthly sales justify the subscription cost. Compare the numbers before committing.
What if my customer paid me but I haven't received the money yet?
Check your Activity to confirm the payment went through. If it shows as completed, the money is in your PayPal balance. If PayPal is holding it, you'll see a note explaining why and when it will be released. If the payment shows as pending or failed, contact the customer to confirm they completed the transaction, or reach out to PayPal Support.