What you need to set up PayPal

To create a PayPal account, you need a valid email address, a phone number, and either a debit card, credit card, or bank account. PayPal will verify your identity using information you provide during signup, and you'll choose a password. The whole process takes about 10 minutes if you have your payment method details ready.

PayPal offers two account types: Personal and Business. A Personal account is free and lets you send money to friends, pay for purchases online, and receive payments. A Business account costs nothing to open but is designed for people who sell goods or services and need invoicing tools and transaction reports. Most people start with Personal.

You don't need to link a payment method immediately to create the account, but you will need one before you can send money or make purchases. Receiving money works without a linked card or bank account — PayPal holds the funds in your account balance until you transfer them out.

Key Takeaways

  • You need an email address, phone number, and at least one payment method (debit card, credit card, or bank account) to create a PayPal account.
  • Personal accounts are free and take about 10 minutes to set up; Business accounts are also free but include seller tools.
  • PayPal will ask you to verify your identity by confirming your email and phone number before you can send money.
  • You can receive money without linking a payment method, but you must link one before you can send money or pay for purchases.
  • PayPal charges fees only when you send money to friends in certain countries or when you receive payments as a seller.

Step-by-step account creation

Go to paypal.com and click "Sign Up" in the top right corner. Choose whether you want a Personal or Business account. Personal is the standard choice for most people; Business is for sellers or people who invoice clients.

Enter your email address, create a password (PayPal requires at least 8 characters, including uppercase, lowercase, and a number), and provide your full name, date of birth, and phone number. PayPal will send a verification code to your email and to your phone. Enter both codes to confirm your identity.

Next, link a payment method. Click "Link a card or bank account" and choose whether you're adding a debit card, credit card, or bank account. If you add a card, enter the card number, expiration date, and CVV. If you add a bank account, you'll provide your routing number and account number. PayPal will verify the account by making two small deposits (usually under $1) to your bank account, which takes 1 to 2 business days. You'll then confirm the amounts in your PayPal account to complete verification.

Once your payment method is verified, your account is fully active and ready to use.

Verifying your identity with PayPal

PayPal requires email and phone verification before you can send money. During signup, you'll receive a code via email and a code via text message. Enter both codes on the verification screen to prove you control that email and phone number.

If you're adding a bank account, PayPal performs an additional verification step. The company deposits two small amounts (usually between $0.01 and $0.99) into your bank account within 1 to 2 business days. You then log into your PayPal account, go to your bank account settings, and enter those two amounts. This confirms you have access to the bank account you listed.

For credit or debit cards, PayPal may ask you to confirm a small charge that appears on your statement within a few days. This is a security check to ensure the card belongs to you.

Linking a bank account versus a card

Linking a bank account and linking a card both work, but they have different advantages. A bank account connection lets you transfer money out of PayPal for free, while transferring to a card usually costs a small fee (typically $1.50 for instant transfers, or free if you wait 1 to 3 business days). If you plan to move money out of PayPal regularly, a bank account is cheaper.

A debit or credit card is faster to set up — verification happens within a few days instead of 1 to 2 weeks. Cards are also useful if you don't want to give PayPal direct access to your bank account. However, using a credit card to fund PayPal payments may trigger cash advance fees from your card issuer, so check your card's terms first.

You can link both a bank account and a card to the same PayPal account. When you send money or make a purchase, you'll choose which one to use.

What happens after you create your account

Once your account is active, you can immediately receive money from other PayPal users. They send it to your email address, and the funds appear in your PayPal balance. You don't need to do anything to receive it.

To send money to a friend, click "Send & Request" and enter their email address or phone number. Choose the amount and whether it's a personal payment (usually free between friends in the US) or a goods-and-services payment (which includes a fee). The recipient gets a notification and can accept the payment into their own PayPal account or bank account.

To use PayPal to pay for online purchases, look for the PayPal button at checkout on any website that accepts it. Click it, log in, and confirm the payment. PayPal will charge your linked card or bank account and send a receipt to your email.

Fees you should know about

Sending money to friends in the US is free if you use your PayPal balance or a linked bank account. If you use a credit card to send money to a friend, PayPal charges 2.2% plus $0.30. Receiving money from friends is always free.

If you use PayPal to pay for goods or services online, there is no fee to you — the merchant pays PayPal a fee instead. When you transfer money out of your PayPal account to your bank account, it's free if you wait 1 to 3 business days, or $1.50 if you want the money instantly.

If you open a Business account and receive payments from customers, PayPal charges 2.2% plus $0.30 per transaction. This is the standard merchant fee and applies whether the customer pays with a card, bank account, or PayPal balance.

Troubleshooting common signup problems

If PayPal says your email is already registered, you may have created an account in the past and forgotten about it. Go to paypal.com, click "Log In", and use "Forgot Password?" to reset your password and regain access to that account. If you no longer have access to the email address, contact PayPal Support through the Help Center on paypal.com.

If your payment method is declined during verification, the card or bank account may not be set up correctly in PayPal's system. Double-check the card number, expiration date, and CVV, or the routing and account numbers for your bank. If the information is correct, contact your card issuer or bank to confirm they allow PayPal transactions. Some banks block PayPal by default for security reasons.

If you don't receive the verification code via email or text, check your spam folder for the email and your phone's SMS settings. You can also request a new code by clicking "Resend Code" on the verification screen. If codes still don't arrive, contact PayPal Support.

Frequently Asked Questions

Do I have to link a payment method to create a PayPal account?

No. You can create an account with just an email address and phone number. However, you must link a payment method before you can send money or make purchases. You can receive money without one linked.

How long does it take to verify a bank account?

Email and phone verification happens instantly or within minutes. Bank account verification takes 1 to 2 business days for PayPal to deposit the two small amounts, then a few minutes for you to confirm them in your account. The entire process is usually complete within 2 to 3 business days.

Can I use a prepaid card with PayPal?

Some prepaid cards work with PayPal, but not all. Prepaid cards that are Visa or Mastercard branded usually work. Check your card's terms or contact the card issuer to confirm PayPal is supported. Reloadable prepaid cards are more likely to work than single-use cards.

What's the difference between sending money as "friends and family" versus "goods and services"?

Friends and family payments are free (in the US) and have no buyer protection — you're trusting the other person. Goods and services payments include a 2.2% plus $0.30 fee and offer buyer protection if the item doesn't arrive or isn't as described. Use friends and family for personal transfers and goods and services for purchases.

Can I delete my PayPal account after I create it?

Yes. Log into your account, go to Settings, click "Account", then "Close your account". You must have a zero balance and no pending transactions. If you have money in your account, transfer it to your bank account first. Closed accounts cannot be reopened, so you'd need to create a new one if you want to use PayPal again.