Set up a PayPal account and link your bank details

To accept credit card payments on PayPal, you need a PayPal Business or Premier account — a personal account cannot receive card payments. If you already have a personal account, you can upgrade it to Business at no cost through your account settings. Go to your account, select "Upgrade to Business", and follow the prompts. PayPal will ask for your business name, tax ID (or Social Security number if you are a sole proprietor), and the type of business you run.

Once your account is upgraded or created, link your bank account so PayPal can deposit the money you receive. Go to "Wallet" or "Settings", find "Bank Accounts", and add your routing and account number. PayPal will make two small test deposits to your account within a few days — you will need to confirm the amounts in your PayPal account to verify ownership. This step is required before you can withdraw funds.

You do not need to add a credit card to your PayPal account to accept payments, though you can if you want to use PayPal's balance to make purchases. The card you add is separate from the cards your customers will use to pay you.

Key Takeaways

  • You must have a PayPal Business or Premier account to accept credit card payments; personal accounts cannot receive them.
  • Link your bank account to PayPal so funds can be deposited — PayPal sends two test deposits you must confirm before withdrawals work.
  • PayPal charges a fee for each card payment: 2.2% plus $0.30 for standard transactions, or a different rate if you use PayPal Checkout or other tools.
  • Your customer can pay by entering their card details directly on PayPal's page, or you can collect their card information and process it yourself through PayPal's tools.
  • Money from card payments lands in your PayPal balance immediately but takes one to three business days to reach your bank account.

Choose how customers will enter their card information

PayPal offers two main ways for customers to pay you with a credit card. The first is PayPal Checkout, where your customer clicks a "Pay with PayPal" button, enters their card details on PayPal's secure page, and completes the payment without leaving your website or app. This is the safest method because the customer's card never touches your systems — PayPal handles the security. You can add a PayPal Checkout button to your website, email invoice, or payment link.

The second method is Virtual Terminal, a tool in your PayPal account where you manually enter a customer's card details and process the payment yourself. This is useful if a customer calls you with an order, or if you are taking payments in person and do not have a card reader. Go to "Tools" in your PayPal account, select "Virtual Terminal", and enter the card number, expiration date, CVV, and billing address. Virtual Terminal charges the same fee as Checkout but requires you to store or handle the card information, which carries more security responsibility.

A third option is PayPal Here, a mobile card reader you can plug into your phone or tablet to swipe or insert physical cards in person. This is separate from online payments but uses the same PayPal account and fee structure.

Understand PayPal's fees for credit card payments

PayPal charges 2.2% plus $0.30 for each standard credit or debit card payment made through Checkout or Virtual Terminal. This means if a customer pays you $100 by card, PayPal keeps $2.50 and you receive $97.50 in your PayPal balance. The fee is deducted automatically — you do not pay it separately.

Different PayPal tools have different rates. If you use PayPal Commerce Platform (for high-volume sellers), the rate may be lower. If you use PayPal Invoicing to send an invoice that includes a card payment option, the rate is the same 2.2% plus $0.30. If a customer pays you through PayPal's balance or linked bank account instead of a card, there is no fee.

There are no monthly fees, setup fees, or hidden charges for accepting cards on PayPal. You only pay when a payment is processed. International card payments may have a slightly higher fee — PayPal's website shows the exact rate for your country.

Send a payment link or invoice to collect card payments

You do not need a website to accept card payments on PayPal. You can send a payment link directly to a customer via email or text, and they can pay by card without logging into PayPal. Go to "Tools" in your account, select "Create Payment Link", enter the amount and description, and copy the link. Send it to your customer — they click it, enter their card details on PayPal's page, and the payment is complete.

Alternatively, use PayPal Invoicing to send a formal invoice. Go to "Tools", select "Create Invoice", fill in your customer's email, the amount, and a description of what they are paying for, then send it. The invoice includes a "Pay Now" button that lets the customer pay by card, PayPal balance, or bank transfer. Invoicing is useful if you want a record of what the payment was for, or if you need to send receipts.

Both payment links and invoices can be sent to as many customers as you need. Each link or invoice is unique and can only be paid once. If a customer loses the link, you can resend it from your PayPal account.

Receive and withdraw your money

When a customer pays you by credit card, the money appears in your PayPal balance immediately. You can see it in your account under "Wallet" or "Money". From there, you have two choices: keep the money in PayPal and use it to make purchases or send payments to others, or transfer it to your bank account.

To transfer money to your bank account, go to "Wallet", select "Transfer Money", choose "Transfer to Your Bank", enter the amount, and confirm. The transfer takes one to three business days depending on your bank. PayPal does not charge a fee for transfers to your own bank account in the United States. If you transfer to a bank account in another country, PayPal may charge a fee — check your account settings for the exact amount.

You can set up automatic transfers so money moves to your bank account on a schedule you choose — daily, weekly, or monthly. This removes the step of manually transferring each time. Go to "Settings", select "Transfers", and choose your preferred schedule.

Handle refunds and disputes

If you need to refund a customer, go to your PayPal account, find the transaction under "Activity" or "Transactions", and click "Refund". Enter the amount (you can refund part or all of the payment) and confirm. The refund is sent back to the customer's card within one to three business days. PayPal refunds the fee you paid as well — if you charged $100 and paid $2.50 in fees, the refund to the customer is $100 and you get the $2.50 fee back.

If a customer disputes a charge with their credit card company, PayPal will notify you and ask for evidence that the payment was legitimate. This is called a chargeback. Gather any proof you have — order confirmation, shipping receipt, email correspondence — and upload it to PayPal's dispute resolution center within the deadline PayPal gives you (usually 7 to 10 days). If PayPal rules in your favor, the money stays in your account. If the customer wins, the money is returned to them and removed from your PayPal balance.

To reduce disputes, send a receipt or confirmation email to the customer immediately after payment, and keep records of what you delivered. If you ship a physical product, use PayPal's shipping tools so delivery is tracked — this protects you in a dispute.

Frequently Asked Questions

Do I need to tell PayPal what I am selling to accept card payments?

PayPal asks what type of business you run when you upgrade to a Business account, but you do not need to provide detailed product lists or inventory. You can change your business category in your account settings at any time. PayPal may restrict certain categories like gambling or adult content, but most standard businesses are allowed.

What happens if a customer's card is declined?

If a card is declined, PayPal shows an error message to the customer and the payment does not go through. No money is charged, and no fee is deducted from your account. The customer can try a different card or contact their bank to find out why the card was declined.

Can I accept American Express or Discover cards?

Yes, PayPal accepts Visa, Mastercard, American Express, and Discover. The 2.2% plus $0.30 fee applies to all card types. Some customers may have a preference, but PayPal processes all major cards at the same rate.

How long does it take to get approved to accept card payments?

If you upgrade an existing PayPal account to Business, you can start accepting card payments immediately. If you are creating a new account, PayPal may review your information and approve you within a few minutes to a few hours. In rare cases, PayPal may ask for additional documentation and take up to a few business days.

Can I accept card payments on my phone?

Yes, you can use the PayPal mobile app to send payment links or invoices, or use PayPal Here with a card reader. You can also manually enter card details through the app's Virtual Terminal feature, though the desktop version is easier for managing multiple payments.