Set up a PayPal account and link a bank account or card
To receive money through PayPal, you need an active PayPal account connected to a way to move funds out. Start by going to paypal.com and creating an account with your email address and a password. You'll choose between a Personal account (for receiving money from friends and family or selling items) or a Business account (if you're invoicing clients or running a shop). Most people receiving casual payments use Personal.
After your account is created, link a bank account or debit card so PayPal knows where to send your money. Go to your Wallet or Settings, select "Add a bank account" or "Add a card", and follow the prompts. PayPal will verify the account by depositing two small amounts (usually under $1 each) into your bank account over a few days. You'll confirm those amounts in your PayPal settings to prove you own the account. Until you complete this step, you can receive money but cannot withdraw it to your bank.
Key Takeaways
- You need a PayPal account with a linked bank account or debit card before you can receive and withdraw money.
- The person sending you money needs your PayPal email address or phone number, or you can send them a payment request link.
- Money arrives in your PayPal balance instantly, but moving it to your bank account takes one to three business days depending on your bank.
- PayPal holds some payments for up to 21 days if you're new, have low activity, or receive an unusually large amount.
- You can see the status of any incoming payment in your Activity or Transaction History within your account.
Share your PayPal email or request payment from someone
Once your account is set up, the person sending you money needs to know how to reach you. Give them your PayPal email address—the one you used to create your account. They log into their own PayPal account, click "Send Money", enter your email, type the amount, and choose "Friends and Family" (no fees) or "Goods and Services" (PayPal takes a small cut). The payment goes through instantly if both accounts are verified.
If you want to be the one who initiates the request, you can send a payment request instead. In your PayPal account, go to "Request Money", enter the sender's email address, the amount, and a description of what it's for. They'll receive a notification and can approve it with one click. This method is useful when someone owes you money and you want to make it easy for them to pay without having to remember your email or type in the amount themselves.
Understand where your money goes and how long it takes
When someone sends you money, it lands in your PayPal balance immediately. That balance is separate from your bank account—it sits in PayPal's system. From there, you can spend it using a PayPal debit card, send it to someone else, or transfer it to your linked bank account. To move it to your bank, go to your Wallet, click "Transfer Money", select "Transfer to your bank", choose the account, and enter the amount. The transfer takes one to three business days depending on your bank's processing speed.
Some payments are held temporarily before they land in your balance. PayPal freezes funds for up to 21 days if you're a new account holder, haven't received many payments before, the amount is unusually large for your account, or the sender used a credit card instead of a bank account. You can see the hold status in your Activity tab—it will say "Pending" and show the expected release date. The money is yours; it's just not available to withdraw yet.
Recognize when a payment fails or is reversed
Occasionally a payment doesn't go through. The sender's bank might decline it, their account might not have enough funds, or there could be a mismatch in their account details. If this happens, you'll see the transaction in your Activity marked as "Failed" or "Cancelled". PayPal sends a notification to both of you explaining why. The sender can try again, or you can ask them to use a different payment method.
A reversal is different—the money arrived and you received it, but the sender later disputed the charge or asked PayPal to send it back. This can happen if the sender claims they didn't authorize the payment, didn't receive what they paid for, or their card was used without permission. When a reversal happens, PayPal removes the money from your balance and returns it to the sender. You'll see it marked as "Reversed" in your Activity. If you believe the reversal was wrong, you can respond to the dispute through your Resolution Center within 10 days.
Protect yourself from common receiving scams
Scammers sometimes send money to a PayPal account, ask the recipient to buy something or wire funds elsewhere, and then reverse the payment once the recipient has already sent their own money out. Never send money to someone else after receiving a PayPal payment, especially if they ask you to do so quickly or claim there's an urgent reason. Wait until the payment has cleared (no longer shows as Pending) and the money has been in your account for at least a few days before trusting it completely.
Be cautious of overpayment scams too. Someone sends you more than the agreed amount, then asks you to refund the difference. By the time you send the refund, their original payment bounces or is reversed, leaving you short. If someone overpays, tell them to request a refund through PayPal rather than sending them money directly. Also, never click links in emails claiming to be from PayPal—go directly to paypal.com instead. Scammers create fake login pages to steal account credentials.
Check your transaction history and download records
Every payment you receive shows up in your Activity tab, which you can access from your account dashboard. Click on any transaction to see details: who sent it, when it arrived, the amount, the status (Completed, Pending, or Reversed), and any notes they included. This is your record of the payment, and you can use it to prove you received money if there's ever a dispute.
If you need records for taxes, accounting, or a dispute, you can download your transaction history. Go to your Activity, use the filters to narrow down by date range or transaction type, and look for a "Download" or "Export" option. PayPal can generate a report in CSV or PDF format showing all your incoming and outgoing payments. Keep these records for at least three years in case you need them for tax purposes or to resolve a later dispute.
Frequently Asked Questions
What's the difference between Friends and Family and Goods and Services?
Friends and Family is for personal transfers with no fees—PayPal doesn't charge either person. Goods and Services is for business transactions; PayPal takes a percentage (usually around 2.9% plus $0.30 per transaction in the US). Use Friends and Family for splitting rent or paying back a loan. Use Goods and Services if you're selling something or invoicing for work.
Why is my payment still showing as Pending after three days?
PayPal holds new accounts, large amounts, or payments from credit cards for up to 21 days. Check your Activity tab—it should show the expected release date. If it's been longer than 21 days or you see no release date, contact PayPal Support through your Resolution Center. Holds are normal and don't mean anything is wrong; the money will arrive.
Can I receive money if I don't have a bank account linked yet?
Yes, money will land in your PayPal balance immediately. However, you won't be able to transfer it to a bank account or withdraw it until you link one. You can still spend the balance using a PayPal debit card or send it to someone else's PayPal account.
What happens if someone sends me money by mistake?
Contact the sender and ask them to request a refund through PayPal. They can do this in their Activity tab by clicking the transaction and selecting "Request refund". You'll get a notification, and you can approve it with one click. Don't send your own money back—let PayPal handle it so there's a clear record.
Do I have to pay taxes on money I receive through PayPal?
That depends on what the money is for. Money from friends splitting expenses or gifts is usually not taxable. Money you receive for selling items or providing services is income and may be taxable depending on the amount and your location. PayPal reports large transaction volumes to the IRS, so keep your own records of what payments were for business versus personal.