PayPal Business Account Review for 2023: How It Works, Who Should Get One

PayPal's simple setup and transparent fees make it a great starter option for new businesses.
Dalia Ramirez
By Dalia Ramirez 
Edited by Ryan Lane

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NerdWallet rating 

What is a PayPal Business account?

PayPal Business accounts are PayPal accounts that allow small and medium-size businesses to send and receive payments in person and online. These accounts have slightly higher rates than those from other top payment processing companies like Square and Stripe. But PayPal Business’s ease of use, ubiquity and transparent fixed fees make it a solid choice for new businesses or those with fairly low transaction volumes.

If your business has higher sales volumes, look into cheaper credit card processors that offer interchange-plus pricing and volume discounts to save on per-transaction fees.



Easy to use and integrate with website hosts and shopping carts.

Not for high-risk or high-volume businesses.

One of the most commonly used payment processing platforms.

Slightly higher per-transaction fees than competitors.

Transparent fixed fees in 25 currencies.

Other payment processors have better in-person point-of-sale options.

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Deciding factors

Best for

Small-to-medium businesses.

Monthly fee

  • $0 per month for standard service.

  • $5 per month for Payments Advanced.

  • $30 per month for Payments Pro.

Processing rates

  • 1.9% plus 10 cents for PayPal or Venmo QR code payments.

  • 2.29% plus 9 cents for in-person credit and debit card payments.

  • 2.59% plus 49 cents for online credit and debit card payments.

  • 3.49% plus 49 cents for PayPal Payments transactions (PayPal, Pay Later, Pay with Rewards, Venmo).

Accepted payment methods

  • PayPal and Venmo.

  • Debit and credit cards.

  • Alternative payment methods, including cryptocurrency (fees vary).

  • Pay-later options, including short-term payments and PayPal Credit.


Extensive integrations with major websites, shopping carts and POS systems, including PayPal’s own POS (PayPal Zettle).

Payout timing

Instant payout to PayPal account; transfer to bank account within three to five business days or instantly for additional 1.5% fee.

Contract length

Contract-free with no termination fees.

Customer support

Phone support from 8 a.m. to 8 p.m. Central time Monday through Friday plus text support, an online community and a resolution center for transaction or account issues.

Ease of use

Simple sign-up and payment processing.

How does PayPal Business work?

PayPal lets small businesses accept and process payments in person and online.

  • Merchants can accept all major payment types for reasonable fees without a monthly subscription.

  • PayPal Business users can accept payments from customers without PayPal accounts, as well as send and receive payments in 25 currencies.

  • Online businesses also have the option of setting up a payment gateway to facilitate checkout with major e-commerce platforms.

Here are a few of the extra features and integrations available for PayPal Business accounts.


PayPal Business integrates with hundreds of shopping carts, POS systems, accounting software products, e-commerce platforms and more.

The platform also offers PayPal Payouts for mass payments and its own POS app, PayPal Zettle (formerly PayPal Here), for businesses to accept payments in-store.

Seller protection

PayPal Business advertises 24/7 monitoring for sellers. Its Seller Protection program covers two buyer complaint types: “Unauthorized Transaction” and “Item Not Received.” For both of these claims, PayPal will side with the seller if basic requirements are met.

Subscription payments and invoicing

PayPal Business users can set up customized subscription and interval payments with built-in flexible incentives, like free and discounted trial periods. It also offers a free invoicing app, which comes with customizable templates and easy link sharing.

PayPal Business account fees

Payment processing fees for PayPal Business accounts generally range from 2.29% to 3.49% plus 9 to 49 cents per transaction plus monthly fees ranging from $0 to $30 for payment gateways. The price of using PayPal for business is a combination of per-transaction fees plus an optional monthly subscription fee for online card payment gateway services.

Per-transaction fees

  • 1.9% plus 10 cents for PayPal or Venmo QR code payments over $10.

  • 2.29% plus 9 cents for in-person credit and debit card payments.

  • 2.59% plus 49 cents for online credit and debit card payments.

  • 3.49% plus 49 cents for PayPal Payments transactions (PayPal, Pay Later, Pay with Rewards, Venmo).

Recurring billing

All merchants can include recurring billing as an add-on service for an additional $10 monthly.


When no currency conversion is involved, you can transfer PayPal funds to a linked bank account for free. Funds usually arrive within three to five business days. Instant transfers are available for 1.5% of the withdrawal amount, with a 50-cent minimum fee.

Chargeback fees and fraud protection

PayPal charges a $20 settlement fee for credit and debit card transaction chargebacks, which happens when a customer rejects a charge through their card issuer.

PayPal Business offers advanced Fraud Protection Services at $10 per month plus 5 cents per transaction to help counteract chargebacks and other issues.

Types of PayPal payment gateways

PayPal Business offers three monthly payment gateway options for merchants:




Payments Standard


  • Plug-in integrates with shopping cart.

  • Redirects customers to PayPal’s website to complete payment.

Payments Advanced

$5 monthly.

  • Lower per-transaction rate.

  • Hosted checkout page.

  • Customizable payment buttons.

Payments Pro

$30 monthly.

  • Lower per-transaction rate.

  • Hosted checkout page.

  • Customizable payment buttons.

  • Virtual terminal access.

  • Accept phone payments.

PayPal Business pros

Ease of use

One of the biggest advantages of using PayPal Business as your payment processor is how straightforward the platform is, for both you and your customers. Simple integration is available with a majority of website hosts and shopping carts, making it a quick and easy way to start accepting payments as soon as you start your business.


PayPal is one of the most commonly used payment processing platforms, which makes it a go-to for customers and merchants alike. Many users will already be familiar with PayPal, so the interface likely won’t be a big adjustment for new business owners. Because so many people use PayPal, there's also more information available online about how to troubleshoot specific problems — for example, on the company's large online forum for merchants, PayPal Community.

Transparent fees

PayPal’s flat-rate per-transaction fees are extremely transparent, allowing merchants to accurately predict their monthly payment processing costs.

PayPal Business cons

Not for high-risk businesses

New merchants looking to use PayPal as their payment processor must adhere to the platform’s Acceptable Use Policy, and the platform has fairly strict standards. The company requires preapproval to accept payments for certain items that are age-restricted or have a high risk for card fraud or chargebacks, including for high-value items, products like alcohol and tobacco or items on online marketplaces. The company also doesn't support certain high-risk merchants, such as businesses that sell firearms or drug paraphernalia.

If your business is in one of these industries, consider going with a high-risk merchant account instead.

Withheld funds and frozen accounts

PayPal’s strict terms of use, though helpful for user safety, can sometimes result in wrongful fund withholding, account freezing and even account termination. The platform has been known to flag “suspicious behavior” such as sudden increases in processing volume, vague product descriptions and more. This problem has also been noted with other payment service providers, including competitors like Square and Stripe.

Customer service

Though PayPal Business offers phone support at 888-883-9770 from 8 a.m. to 8 p.m. Central time Monday through Friday, text support, an online community forum and a resolution center for transaction or account issues, the usefulness of the support is hit-or-miss, according to reviews. Customer service representatives’ expertise is said to vary.

PayPal Business alternatives


Payment processing:

  • 2.6% plus 10 cents for in-person transactions.

  • 2.9% plus 30 cents for online transactions.

  • 3.5% plus 15 cents for manually keyed transactions.

  • 3.3% plus 30 cents for invoices.

Why we like it: Square is a popular payment processor with many of the same features as PayPal Business at a slightly lower cost. Square, unlike PayPal, offers virtual terminal access at no additional charge. It doesn’t offer multi-currency capabilities, though. It may be a better option if you’re looking for more customization options and aren’t planning to expand your business internationally.

Square Payments

Shop Now

on Square's website


Payment processing:

  • 2.7% plus 5 cents for in-person transactions.

  • 2.9% plus 30 cents for online transactions.

  • 3.4% plus 30 cents for manually keyed transactions.

  • 4.4% plus 30 cents for international card transactions.

Why we like it: Stripe is also a worthy PayPal Business competitor, especially for e-commerce businesses with an international presence. These charges are slightly lower than PayPal’s current rates. Unlike Square, Stripe accepts over 135 currencies and is also much more customizable than PayPal.


NerdWallet rating 
Shop Now

on Stripe's website

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