PayPal basics for business owners

What PayPal is, the different account types, how it fits into your website, and what to expect when using it as a payment option.

PayPal is one of the most recognized payment brands in the world. Many customers trust it and actively look for it at checkout. This guide covers what PayPal offers businesses, how it works on your website, and what you need to get started.

Quick summary

PayPal lets your customers pay with a PayPal account or a card without a PayPal account. It is widely trusted and easy to add to most websites. PayPal charges a fee per transaction and pays out to your linked bank account. A free Business account is all you need to get started.

PayPal account types

PayPal offers different account types. For a business, you want a Business account.

Account type	Who it is for
Personal	Individual consumers sending money to friends or buying online
Business	Businesses accepting payments from customers — this is what you need

If you currently have a Personal account and want to accept business payments, you can upgrade it: go to Settings, then under Account Options click Upgrade to a Business Account. You can also register a Business account from scratch. PayPal allows one Personal and one Business account per person, each on its own email address, and most Business accounts cannot be downgraded again.

A Business account lets you:

Accept card payments from customers without a PayPal account
Show your business name on invoices and checkout pages
Accept payments through your website
Create and send invoices
Access PayPal's seller protections

How PayPal works on your website

There are two main ways PayPal appears on a website:

PayPal buttons

Your customer clicks a PayPal button at checkout and confirms the payment with PayPal, then comes back to your site. PayPal calls this its standard payments integration, and it is the classic PayPal experience. Older names you may still see in plugin settings, such as "Smart Payment Buttons", refer to the same thing.

PayPal card fields

Card entry fields appear directly on your site, so customers can pay by card without going through PayPal's own screens. PayPal hosts the fields themselves, which is what keeps card data out of your website. PayPal's current component is called Card Fields; an older one called Hosted Fields still exists but is no longer being developed.

Most website platforms support one or both of these options. We configure which version is best for your setup.

PayPal fees

PayPal charges a fee per transaction, and the rate depends on how the customer paid. In the US, PayPal's published commercial rates put a PayPal or Venmo wallet checkout at a higher percentage than a plain card payment taken through PayPal, and both sit above Stripe's standard card rate. There is also an extra percentage on international payments.

Do not budget from those comparisons alone. The exact numbers change, and they vary by country, card and product.

Check PayPal's current rates

PayPal's fee structure is detailed and can vary. Always check your PayPal account's fee schedule or PayPal's business fees page for the rates that apply to your business, and stripe.com/pricing if you are comparing.

PayPal says there is no fee to open a Business account and no monthly maintenance fee: you normally pay only when you receive a payment for goods or services. Some optional extras and older gateway products, such as Payflow Pro, do carry a monthly charge — the same fees page lists which.

How PayPal payouts work

By default, PayPal holds your funds in your PayPal balance. You must manually initiate a transfer to your linked bank account, or enable automatic transfers.

Standard transfer: No fee, and usually completes in one to three business days.

Instant transfer: Charges a fee, and typically completes within minutes.

Funds sit in your PayPal balance until you move them

Unlike Stripe, which proactively sends payouts on a schedule, PayPal holds your money in your PayPal account. If you want funds to move to your bank regularly without manual action, set up automatic transfers: click Finance, then Money, then More Actions, and select Set Up Auto Transfers. See Payouts & bank transfers for the full walkthrough.

Seller protection

PayPal runs a Seller Protection program for eligible transactions. It can apply when a buyer says they never received the item, or says they did not authorise the payment at all, and PayPal decides eligibility case by case.

The requirements are strict. Among them: the item normally has to be a physical good you can ship, you have to ship it to the address shown on the transaction details page in your PayPal account, you need online, verifiable tracking, and you have to respond to PayPal's requests for documents on time. One catch worth knowing: an "item not received" claim that the buyer files as a chargeback with their own card issuer is not covered.

The full terms form part of PayPal's User Agreement, and not all transaction types are covered.

Giving Chykalophia access to your PayPal account

If we are integrating PayPal into your website, you will need to give us access. See Give us access to your PayPal account for instructions.

Common questions

Does my customer need a PayPal account to pay?

No. PayPal allows customers to pay with a debit or credit card without logging in to or creating a PayPal account. However, customers with a PayPal account can check out faster using their stored payment details.

Can I accept PayPal alongside Stripe?

Yes. Many websites offer both options at checkout. Customers can choose which they prefer. See PayPal vs Stripe for a comparison.

What is PayPal Checkout vs PayPal Payments Standard?

These are older product names, and PayPal has renamed its line-up more than once. Today PayPal's developer docs talk about standard payments (the PayPal button) and its expanded checkout options (card fields and other payment methods), while the fee schedule still uses labels like "PayPal Checkout" and "Standard Credit and Debit Card Payments". The underlying functionality is similar — your developer will configure the right integration for your platform.

Can PayPal put a hold on my funds?

Yes. PayPal holds the initial payments a new seller receives for up to 21 days, and reviews seller accounts monthly to decide whether money can be released faster. You can speed up an individual hold by opening the payment in your transactions and confirming the product or service has been sent. Building a positive selling history, confirming your identity and keeping a confirmed bank account and phone number on file all help.

What happens if a customer disputes a payment on PayPal?

PayPal has its own dispute resolution process separate from credit card chargebacks. A customer first raises a dispute in PayPal's Resolution Center. If unresolved, it can escalate to a claim. See Chargebacks & disputes explained for more.

Need a hand?

If you're stuck, email support@chykalophia.com and we'll help. Include your website address and a screenshot if you can.