What you need to open a PayPal Business Account

A PayPal Business Account lets you accept payments from customers, send invoices, and manage money separately from your personal account. You can open one in about 10 minutes by going to paypal.com, clicking "Sign Up," and choosing the Business option instead of Personal.

PayPal will ask for your legal business name, your personal name, your address, phone number, and email. You'll also need a Social Security Number or Individual Taxpayer Identification Number (ITIN) if you're a sole proprietor, or an Employer Identification Number (EIN) if you've registered your business as an LLC or corporation. If you don't have an EIN yet, you can still open the account with your SSN and add the EIN later.

You'll set up login credentials and link a bank account or debit card so PayPal can verify your identity and send you money. The verification usually takes one to two business days, though PayPal may ask for additional documents if your account looks unusual to their fraud system.

Key Takeaways

  • You need a legal business name, personal identification, and either a Social Security Number or EIN to start the signup process.
  • Linking a U.S. bank account or debit card is required so PayPal can verify your identity and deposit your earnings.
  • The account is active immediately, but you cannot withdraw money until PayPal confirms your bank account, which takes one to two business days.
  • Business Accounts charge a fee per transaction (usually 2.99% plus $0.30 for domestic payments), while Personal Accounts do not, so choose based on whether you're receiving money from customers or friends.

Choosing between Business and Personal Accounts

A Business Account is designed for people who receive payments from customers in exchange for goods or services. A Personal Account is for sending and receiving money from friends and family. If you use a Personal Account to regularly receive customer payments, PayPal may freeze it and ask you to convert to Business or close the account.

Business Accounts charge a transaction fee: 2.99% plus $0.30 per transaction for standard domestic payments. Personal Accounts have no per-transaction fees when receiving money from other Personal Accounts, but you'll pay a fee if someone sends you money as a "goods and services" payment. If you're unsure, a Business Account is the safer choice if you plan to invoice customers or sell anything online.

Step-by-step signup process

Go to paypal.com and click "Sign Up" in the top right corner. Select "Business Account" from the two options shown. Enter your email address and create a password with at least 8 characters, including uppercase, lowercase, numbers, and a symbol.

On the next screen, enter your legal business name, your first and last name, your street address, city, state, ZIP code, and phone number. PayPal will ask what type of business you operate (sole proprietor, LLC, corporation, etc.) and what you sell or what services you provide. Answer honestly—this information helps PayPal's fraud system and is not a commitment to any particular business structure.

Enter your Social Security Number or ITIN. If you have an EIN, you can add it now or skip it and add it later in Account Settings. Then link a bank account or debit card. PayPal will make two small deposits to your bank account (usually $0.01 and $0.02) within one to two business days. You'll need to confirm these amounts in your PayPal account to verify ownership.

Once you confirm the deposits, your account is fully verified and you can withdraw money. The entire process typically takes two to three business days from start to finish.

What happens if PayPal asks for more documents

PayPal's automated system may flag your account for additional review if your information doesn't match their records, if you're in a high-risk industry, or if the account activity looks unusual. When this happens, you'll see a message in your account asking you to upload documents.

Common requests include a photo ID (driver's license or passport), a recent utility bill or bank statement showing your address, and sometimes a business license or tax return. Upload clear photos or scans—blurry or partial images will be rejected and you'll have to resubmit. PayPal usually reviews these within 24 to 48 hours and will email you the result.

If your account is limited or frozen during this process, you can still log in and see your balance, but you cannot send or receive money until the review is complete. This is temporary and not a permanent closure. Respond to PayPal's requests promptly—delays can extend the review period.

Linking your bank account and confirming deposits

After you enter your bank account information during signup, PayPal deposits two small amounts (totaling about $0.03) into that account. These deposits appear within one to two business days. You need to log into your PayPal account, go to Wallet or Settings, find the bank account you linked, and enter the exact amounts of those two deposits.

Once you confirm the deposits, PayPal knows you own the bank account and your account is fully verified. You can then withdraw money to that account, and PayPal will send your earnings there automatically or on demand depending on your withdrawal settings.

If you don't see the deposits after three business days, check that you entered your routing number and account number correctly. You can delete the account from PayPal and re-add it with the correct information. If the deposits still don't arrive, contact your bank—some banks block small test deposits from third parties, and your bank may need to allow PayPal through their security settings.

Setting up invoicing and payment buttons

Once your account is verified, you can create invoices to send to customers. Go to the Tools or Activity section of your account and select "Create an Invoice." Enter the customer's email, describe what you're charging for, set the amount, and choose a due date. PayPal will email the invoice to your customer with a link to pay.

You can also create a payment button to embed on a website or share via email or social media. Go to Tools and select "Create Payment Button" or "Create a Donation Button" depending on what you're selling. PayPal will generate a link or HTML code you can use. Customers click the button, enter their payment information, and the money goes directly to your account.

Both invoices and payment buttons are included free with a Business Account. PayPal charges the standard transaction fee (2.99% plus $0.30) when a customer pays, but there's no extra charge for creating or sending invoices.

Understanding fees and withdrawal options

PayPal Business Accounts charge 2.99% plus $0.30 per transaction for most domestic payments. International payments cost more—usually 4.99% plus a fixed fee that varies by country. These fees are deducted from the payment before it reaches your account, so if a customer sends you $100, you receive $96.71 (minus the 2.99% and $0.30).

You can withdraw your balance to your linked bank account at any time. Standard withdrawals take one to two business days. PayPal also offers Instant Transfer for an additional fee (usually 1.5% with a $0.25 minimum), which moves money to your account within 30 minutes. You can set up automatic withdrawals so money transfers to your bank on a schedule you choose (daily, weekly, or monthly).

There is no monthly fee for a Business Account, and you don't pay anything unless you receive a payment. If your account sits unused, PayPal will not charge you.

Frequently Asked Questions

Can I convert my Personal Account to a Business Account?

No, you cannot convert an existing Personal Account. You must create a new Business Account with the same or different email address. If you want to keep your old email, you can change your Personal Account email to something else first, then use your original email for the Business Account.

What if I don't have a bank account yet?

You need a bank account to complete verification and withdraw money. You can open a Business Account without one initially, but PayPal will not let you withdraw your balance until you link and verify a bank account. Some online banks like Chime or Wise can be linked to PayPal and verify quickly.

How long does it take to receive money after a customer pays?

The money appears in your PayPal account instantly when the customer completes payment. Withdrawing that money to your bank account takes one to two business days with a standard transfer, or up to 30 minutes with Instant Transfer (which costs extra).

Can I have both a Personal and Business Account?

Yes, you can have both accounts with different email addresses. However, you cannot link them together or transfer money between them easily. Most people choose one or the other based on how they use PayPal.

What happens if I receive a payment in a currency other than U.S. dollars?

PayPal converts the payment to U.S. dollars automatically and charges a currency conversion fee (usually 2% to 3% on top of the standard transaction fee). The converted amount appears in your account in dollars. You can change your currency settings in Account Settings if you want to receive payments in a different currency.