Do I Need a PayPal Business Account?

Accepting online and mobile payments is quickly becoming an essential part of running a company.

You’re probably wondering if you should open a PayPal Business Account for your company now that PayPal has grown to become the world’s largest online transaction processing company. Setting up a PayPal business account allows you to use functionality that a PayPal personal account does not have. There is no cost to open a PayPal business account, but there are fees for many of the business account features.

Accepting Payments via PayPal

PayPal allows the company to accept payments for goods and services. With a PayPal business account, you can accept payments online as well as in your store or business office, through a mobile card reader, and over the phone. Many people, especially those who shop online, prefer to pay with PayPal.

PayPal can also accept big credit and debit card payments. There are no monthly, setup, or cancellation costs, and no minimum processing requirements. Even if you don’t accept paypal business account fees option for your clients, you can accept credit card payments through PayPal. Your website should have a PayPal checkout button for online payments.

Processing business transactions via PayPal incurs costs, just like every other payment processing company:

  • PayPal charges 2.9 percent of the transaction sum plus a flat fee of 30 cents for online purchases originating in the United States.
  • For funds from other nations, the rate rises to 4.4 percent, plus a flat fee that varies depending on the currency used.
  • The price for purchases at your store is 2.7 percent for funds from the United States and 4.2 percent for funds from other countries, plus the flat rate. Accepting payments in other currencies incurs additional costs.

If you process at least $3,000 a month, you could be eligible for a PayPal merchant discount, which will lower your transaction fees. Furthermore, PayPal provides a variety of premium accounts with varying subscription rates, functionality, and transaction fees.

PayPal’s fees can be higher or lower than those charged by other credit card processing firms. Furthermore, the rates, like those of every other processing firm, are subject to adjustment. It is always a good idea to look around for the best prices and conditions available at the time.

PayPal Credit for Your Clients

PayPal Credit provides credit and conditions to the consumers that could be more favourable than the terms provided by their other credit cards. For example, on transactions of $99 or more, they can pay no interest if the amount is paid in full within six months. This could entice consumers to buy from you rather than a rival who does not accept PayPal Credit.

PayPal Commercial Loans

With a PayPal bank account, the company will apply for two forms of business loans.

PayPal Business Credit. You can apply for a loan ranging from $5,000 to $500,000. According to PayPal, such a loan is best for a company of more than $42,000 in annual sales that has been in operation for at least nine months.

Working Capital through PayPal You will borrow between $1,000 and $125,000. You must have a PayPal business account for at least 90 days and have processed at least $15,000 through PayPal in the last 12 months to be eligible for this form of loan. So, if you want the loan 90 days after opening your business account, you must have processed at least $15,000 in that time frame.

Alternatives to PayPal

If you want to look at other payment processing options, you can look at Amazon Pay, Apple Pay, Dwolla, Google Wallet, WePay, Stripe, and TransferWise. The latter two are particularly common with companies that have a large number of customers in other countries.

Other companies that provide invoicing software, such as FreshBooks, QuickBooks, and Wave, may allow you to accept eChecks and ACH bank transfers from your customers for free.

The Dangers

There is always the possibility that your details will be compromised, as with almost every organization you do business with today. PayPal also wants you to connect your bank account to your PayPal account. PayPal will ask you for your online banking user ID and password in order to do so. This may allow a shady PayPal employee or someone who successfully hacks PayPal to gain access to (or wipe out) your bank account.

PayPal has been known to freeze accounts without notice or clarification. This freezes the funds in your PayPal account before you address the problem that PayPal has found.

PayPal is not a bank, so it is not subject to banking regulations, and your funds held by PayPal are not insured by the FDIC.

To decide if a PayPal business account is right for you, compare the convenience against the fees, consider whether accepting payments through PayPal will improve your business, and consider other available payment processing options.

Visit also: Finance Guide

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