What you need before you start

A PayPal Business account lets you accept payments from customers, send invoices, and track business transactions separately from your personal money. You can open one in about 10 minutes if you have the right information ready.

Before you begin, gather: a valid email address you check regularly, a password you haven't used elsewhere, your Social Security Number or Individual Taxpayer Identification Number, your date of birth, and a current mailing address. If your business is registered as an LLC or corporation, you'll also need your Employer Identification Number (EIN) from the IRS. If you operate as a sole proprietor, your Social Security Number works instead.

You'll need a bank account or debit card to link to PayPal so you can move money in and out. The account doesn't have to be in your business name—many people link their personal bank account to a business PayPal account.

Key Takeaways

  • PayPal Business accounts are free to open and take about 10 minutes if you have your Social Security Number, date of birth, and mailing address ready.
  • You must link a bank account or debit card during setup so PayPal can verify your identity and you can transfer money later.
  • Sole proprietors use their Social Security Number; LLCs and corporations need an EIN from the IRS.
  • Your account goes live when ready, but some features like higher transaction limits may require additional verification steps that take a few business days.
  • PayPal charges transaction fees when you receive payments—typically 2.2% plus $0.30 per transaction for standard payments, though rates vary by payment type.

The step-by-step setup process

Go to paypal.com and click "Sign Up" in the top right. Select "Business Account" from the two options shown. Enter your email address and create a password, then click "Next."

On the next screen, enter your business name, your personal name, your date of birth, and your country. PayPal uses this information to verify your identity. If your business is a sole proprietorship, enter your personal name as the business owner. If it's an LLC or corporation, enter the registered business name.

Enter your mailing address exactly as it appears on official documents. PayPal may mail you a verification code if they need to confirm your identity, so use an address you can receive mail at. Then enter your phone number and click "Agree and Create Account."

PayPal will ask you to confirm your email address. Check the inbox of the email you provided and click the confirmation link. This usually arrives within a few minutes.

Linking your bank account or card

After you confirm your email, PayPal will ask you to add a payment method. You can link a bank account or debit card. A bank account is more find and lets you transfer larger amounts, but a debit card works if you don't want to share your banking details yet.

To link a bank account, enter your routing number and account number. You can find both on a check or by logging into your bank's website. PayPal will make two small deposits (usually under $1 each) to your account within 1–2 business days. You'll then return to PayPal and enter the amounts of those deposits to confirm you own the account.

To link a debit card instead, enter your card number, expiration date, and CVV. PayPal will charge a small amount to verify the card, and you'll see it on your statement within a few days. You don't have to enter a code to confirm a debit card—PayPal verifies it automatically.

Identity verification and limits

Your account is live as soon as you complete the steps above. You can start receiving payments right away. However, PayPal may place temporary limits on how much money you can receive or transfer until they fully verify your identity.

If PayPal needs more information, they'll send you a message in your account dashboard. This usually means they want to confirm your Social Security Number, your business structure, or your bank account ownership. You can upload documents like a driver's license, a bank statement, or a business license through your account settings under "Verification."

Verification typically takes 1–3 business days. During that time, you can still receive payments, but you may not be able to transfer money out or accept payments above a certain amount. Once verification is complete, those limits are removed.

Fees you'll pay as a business account holder

PayPal doesn't charge you to open or maintain a Business account. You only pay when you receive money. The standard rate for domestic transactions (payments from customers in the United States) is 2.2% of the transaction amount plus $0.30 per payment. So if a customer sends you $100, you receive $97.48.

International payments cost more—typically 3.49% plus a fixed fee that varies by country. If you invoice customers through PayPal's invoicing tool, the same transaction fees explore when they pay.

Some payment types have different rates. PayPal Here (in-person card payments) costs 2.7% per swipe. Payments you receive as a "friends and family" transfer (not for goods or services) are free, but you can't use that category for business transactions—PayPal will flag it and may freeze your account.

What to do after your account is open

Once your account is live, set up your business profile. Go to "Account Settings" and add a business logo, description, and website if you have one. This information appears on invoices and payment pages, so customers know they're paying the right business.

Enable two-factor authentication for security. Go to "Security" in your settings and turn on "Security Key" or "Text Message Authentication." This prevents someone from accessing your account even if they steal your password.

If you plan to invoice customers, test the invoicing tool by sending yourself a test invoice first. Go to "Tools" and select "Invoicing." You can customize the invoice template with your business name, logo, and payment terms before you send real invoices to customers.

If you sell physical goods, consider setting up a PayPal Checkout button on your website. PayPal provides code you can paste into your website so customers can pay you directly. Alternatively, you can use PayPal's integration with shopping platforms like Shopify, WooCommerce, or Square if you run an online store.

Common issues and how to fix them

If PayPal rejects your bank account during linking, the most common reason is a typo in your routing or account number. Double-check both numbers against a recent check or your bank's website. Some banks also block PayPal's verification deposits as fraud—call your bank and ask them to allow small deposits from PayPal.

If your account is limited and you can't transfer money out, PayPal usually tells you exactly what information they need. Check your account dashboard for a message from PayPal Support. Upload the documents they request (typically a photo ID and a bank statement) and wait 1–3 business days for review. Do not ignore these requests—PayPal will eventually close your account if you don't respond.

If you're locked out of your account, go to paypal.com and click "Log In," then "Having trouble logging in?" Enter your email address and follow the steps to reset your password. If you no longer have access to your email address, call PayPal's support line at 1-888-221-1161 and provide your account details.

Frequently Asked Questions

Can I use my personal PayPal account to receive business payments?

Technically yes, but PayPal's terms of service say personal accounts are for money between friends and family. If PayPal detects business activity on a personal account, they may freeze it and hold your money for 180 days while they investigate. A Business account is free and takes 10 minutes to open, so it's worth doing it correctly from the start.

How long does it take to transfer money from PayPal to my bank account?

Standard transfers take 1–2 business days. PayPal also offers "when ready Transfer" for a small fee (usually 1.5% of the amount, with a $0.25 minimum), which moves money in minutes. You can set up when ready transfers in your "Wallet" settings once your account is verified.

What happens if a customer disputes a payment?

PayPal holds the disputed amount while they investigate. You can respond with evidence that you delivered the goods or services—tracking numbers, delivery confirmations, or screenshots of the work you did. PayPal typically rules within 10 business days. If you lose the dispute, the money goes back to the customer and you pay a dispute fee (usually $20).

Do I need a separate business license to open a PayPal Business account?

No. PayPal doesn't require you to have a registered business or a business license. Sole proprietors can open a Business account with just their Social Security Number. However, if you operate as an LLC or corporation, you do need an EIN from the IRS, which you can get for free at irs.gov.

Can I have both a personal and a Business PayPal account?

Yes, but they must be linked to different email addresses. You can't merge them later, so choose one email for personal use and a different one for business. If you want to transfer money between them, you'll pay the standard transaction fee (2.2% plus $0.30).