What is a PayPal business account?
PayPal is an online payment processing company that facilitates financial transactions from consumers to other consumers (C2C), consumers to businesses (C2B) and businesses to businesses (B2B). Companies can set up PayPal business accounts to manage the sale of their goods and services online, in person, over the phone or through other mediums.
Related:How to Grow Your Business
Benefits of a PayPal business account
There are several benefits to using aPayPal business account, including:
- Accepting multiple payment methods like credit cards and mobile payment apps
- Operating under your business’s name rather than your personal name
- Simplifying check out for customers to improveconversion rates
- Allowing customers to check out without PayPal accounts
- Performing international transactions
- Allowing recurring subscription payments
- Offering financing options for customers
- Providing individual sign-ins for employees to manage specific aspects of the account
Drawbacks of a PayPal business account
Before signing up for a PayPal business account, it’s important to consider the drawbacks:
- Transaction fees can be high, especially on low-cost purchases
- International transfer fees are pricey
- PayPal often holds funds for 72 hours before you can access it
- Chargeback fees are costly
- PayPal can suspend your account with little notice, which freezes your account and any money you’ve not yet transferred to your bank account
- You may need to rely on PayPal customer service in the case of any errors
How to set up a PayPal business account
Follow these steps to set up your PayPal business account:
1. Sign up
Begin by signing up on the PayPal business account page. You’ll seea button labeled “sign up” that will link to the next step.
2. Enter a business email
Provide an appropriate email address to open the account. You’ll want this to be a company email that is checked by an employee who handles accounts receivable.
3. Select the appropriate account
PayPal offers several types of accounts, so be sure to select “business” to receive all the associated benefits like multi-user access and merchant services.
4. Create a username and password
Select a username and password to access your account after you finish the account setup process.
5. Complete background information
PayPal will ask for some background information to complete your profile, like your business’s website, mailing address and phone number.
6. Include your EIN
Provide your EIN or Employee Identification Number to verify that you’re a business.
7. Confirm your identity
PayPal will send a confirmation email to the provided email address to ensure that you own it. From the email, you’ll be able to confirm your identity and begin using your PayPal business account.
Consider the answers to these frequently asked questions about PayPal business accounts to help you decide if it’s rightfor your company.
